Although budgets are always a problem this is even more in a crisis climate due to ongoing cuts and restrictions. Companies can nevertheless fast and easily learn how to to improve their budgets but their key people responsible for these budgets often are not interested. Why?
Five years now selling to big companies has not only give essential understanding how professionals deal with macroeconomic country intelligence data but also how they allocate funding. Well, they mostly don´t!
To understand this it is important to differentiate all what is related to core business and non core business. This hardly happens, so all is done with the same budget in any layer of the company.
Now mentioning for each sector, product or service these differences is too comprehensive for this posting and therefore this diligence can is focused on industrial sector specific intelligence and macroeconomic intelligence (our core business).
By referring to the challenging business climate we still live in, also makes it more simple explaining the budget differences for core business intelligence and macro. We all know what happened and we all know no one could avoid it or see it coming.
You can of course replace macro with your own product or service. The result is the same, as long as your proposal contributes to budget problems.
While avoiding the budget question is easy by not mentioning it, many potential buyers reply too soon their budgets are restricted, cut or funding is not available (till the next fiscal year).
Some do it better by replying their data bases or specific product needs are under revision or they are streamlining the business.
A logical commercial response would be "even better for this opportunity" but when you finally reached the right person this response is regrettably a dead end.
Only a few keep on listening because what you propose next is what they really should do; looking for smarter spending options or better tools for this climate.
By simply accepting "the budget is not available" nothing will change;
The internal problem will continue, involved personnel is frustrated, have to work harder, the labor costs increase, the productivity drops and worst of all, in the case of macro, the corporate risks of monitoring economic developments increase.
What are realistic short term options for any company dealing with budget problems?
1. Divide core and non core first.
Core is often the priority but in times no one can sell you reliable analyzes you do not have to spend the same on your core intelligence. Better is to use your own corporate network (all stakeholders) to help you understand your market developments and trends. It is less expensive and more efficient.
In the case of macro, which is non core, this opens the door for better tools. No longer relying on the same resource of industrial data but giving employees the chance to gain time, give the company the chance to reduce costs and give risks chances to be better monitored.
Advantages; the budget cut can be limited to what really is necessary for core market or business intelligence. When excluding macro every hour formerly used for macro search can now be spend on core. Labor costs will be justified for only core while better macro data helps professionals understand better external risks to their markets (no more out of date internet info).
Disadvantage; it requires corporate changes and people mostly do not like changes. Streamlining has its limitations. This is also seen at Six Sigma. Project leaders or other key people can disagree, cancel or delay new efficiency for personal reasons. On top, in regards to macro, many professionals are comfortable with wrong estimates from a single but well known source. They prefer to blame them then own colleagues.
Conclusion:
Many will claim not to be able to move in any direction which makes stimulating business decision makers in improving their budgets is a non-profit suggestion.
But when they do not cooperate, are open minded or willing to make an effort by forcing an opening there is only a loss. Not looking for improvements to help cutting spending is the opposite of the corporate strategy.
Even calculating their spending increases by 30, 60 or even 90% does not interest them. Despite affecting business, financial or strategic planning in the case of macro does not change their minds either.
A budget is a budget. In a crisis climate we cut it and if we are fortunate we have some left overs for your product or services. Is that all what is in their powers?
When that is the message after the worst downtrend the last hundred years in business, with all wrong analyzes and forecasts from research providers and economists, ongoing uncertainties in many sectors and more consequences like lay-offs, the following two steps are really necessary:
1. Decision makers / business leaders should consider better what affects their corporate results or well being during a recovery. Only looking at the past, what comes from above (higher management) or protecting the own interest (no changes, save zone mentality) will not make any difference in terms of cost savings.
2. When professionals deal with industrial and economic intelligence they should consider a budget split. Otherwise nothing will improve or change in their benefits.
When this is taken into account any supplier of a product or service should not have to worry about budget restrictions from the buyer but only be worried if a competitor can make a better offer in terms of quality, price and synergies.
When this is true the business leaders on the buy side have decided to adjust and adapt to a business climate that is less favorite but they are certainly better prepared for any upcoming turnaround.
viernes, 9 de abril de 2010
martes, 19 de enero de 2010
We do not want to change!
Do we follow people or strategies?
Perhaps a better title but the result is the same. Managers or / and business leaders upfront are excellent promoters of their own skills and responsibilities but when it comes to changes in their setting the interest suddenly drops.
It is like their strategy is cut off during a conversation or meeting. As long as it is in their own interest they are willing to cooperate. The interest does not depend on what is good for those who pay them.
In fact the following example is a good reflection of following people as a strategy:
Networking tools such as LinkedIn often ask you to respond to a discussion or survey set up by a direct contact or member of a similar group of interest (which is necessary to participate).
Recently here was asked to share in one word what kind of manager or business leader you are.
You will not be surprised 99.9% of the responses were positive and clearly overstating the reality of a person´s own objective reflection .
When all these people are really top managers and apply to their own positiveness the world nowadays would look different or at least better.
Sure, these responses come often from middle management while the real higher management is not active or hardly active at sites like LinkedIn. It also gives to these surveys a kind of Facebook image. I am nice, do you want to be my friend?
In fact they are doing all the same; calling for changes (after being criticized) but not making critical decisions to avoid personal damage (read less income or corporate power).
We already know that for centuries but the fact the middle management copies this behavior of not making changes is disturbing. You have nothing to win but all to loose?
All these managers are send to expensive trainings and courses but when it really matters they often do not decide or change the status quo.
They talk about budget cuts, restrictions, fusions, mergers, reorganizations and other excuses to postpone purchasing your services while sitting in the safety zone.
Why would I risk your service and make a more serious attempt?
I would say because it benefits you and your company but it seems they are not inspired (enough).
Inspiration normally leads to becoming an example to others, open minded, stronger, better informed, prepared and willing to contribute and overall to win.
When not being open for changes you will loose, not win. Still people have the tendency to claim a win while not changing anything. They even believe they can inspire others.
What is said or sad then is that it is too risky to make a change, so they prevented a loss. Really?
Often here is added that when changing for example an external provider of services the work to be done to complete this change is already seen as a loss (of time).
The administration, informing the involved employees, answering questions about the decision and the follow up to complete the new setting; it is all not worth it!
In my work I see this often. But unchanging does not contribute and it certainly not helps the one who takes care of your paycheck.
But look around! Where else do you see this happen besides the corporate arena?
Everywhere! In politics from government to city hall, in the media where news is dictated by a few global parents and even in your private setting where it is amazing how Facebook or Twitter influences your life.
Let´s face it. Change is personal and can be done very fast while changing a setting takes ages. Then it is time to change strategies and focus on other people!
Perhaps a better title but the result is the same. Managers or / and business leaders upfront are excellent promoters of their own skills and responsibilities but when it comes to changes in their setting the interest suddenly drops.
It is like their strategy is cut off during a conversation or meeting. As long as it is in their own interest they are willing to cooperate. The interest does not depend on what is good for those who pay them.
In fact the following example is a good reflection of following people as a strategy:
Networking tools such as LinkedIn often ask you to respond to a discussion or survey set up by a direct contact or member of a similar group of interest (which is necessary to participate).
Recently here was asked to share in one word what kind of manager or business leader you are.
You will not be surprised 99.9% of the responses were positive and clearly overstating the reality of a person´s own objective reflection .
When all these people are really top managers and apply to their own positiveness the world nowadays would look different or at least better.
Sure, these responses come often from middle management while the real higher management is not active or hardly active at sites like LinkedIn. It also gives to these surveys a kind of Facebook image. I am nice, do you want to be my friend?
In fact they are doing all the same; calling for changes (after being criticized) but not making critical decisions to avoid personal damage (read less income or corporate power).
We already know that for centuries but the fact the middle management copies this behavior of not making changes is disturbing. You have nothing to win but all to loose?
All these managers are send to expensive trainings and courses but when it really matters they often do not decide or change the status quo.
They talk about budget cuts, restrictions, fusions, mergers, reorganizations and other excuses to postpone purchasing your services while sitting in the safety zone.
Why would I risk your service and make a more serious attempt?
I would say because it benefits you and your company but it seems they are not inspired (enough).
Inspiration normally leads to becoming an example to others, open minded, stronger, better informed, prepared and willing to contribute and overall to win.
When not being open for changes you will loose, not win. Still people have the tendency to claim a win while not changing anything. They even believe they can inspire others.
What is said or sad then is that it is too risky to make a change, so they prevented a loss. Really?
Often here is added that when changing for example an external provider of services the work to be done to complete this change is already seen as a loss (of time).
The administration, informing the involved employees, answering questions about the decision and the follow up to complete the new setting; it is all not worth it!
In my work I see this often. But unchanging does not contribute and it certainly not helps the one who takes care of your paycheck.
But look around! Where else do you see this happen besides the corporate arena?
Everywhere! In politics from government to city hall, in the media where news is dictated by a few global parents and even in your private setting where it is amazing how Facebook or Twitter influences your life.
Let´s face it. Change is personal and can be done very fast while changing a setting takes ages. Then it is time to change strategies and focus on other people!
jueves, 17 de diciembre de 2009
Purchasing brand identity is still preferred. But for how long?
Client behavior:
We are now in business for ten years and the last five years I had the chance to discuss with a lot of business leaders world wide.
From non cooperative narrow minded fearful closed managers to final customers who took the time to listen to the alternative for our kind of market data.
Before discussing end proposals it is interesting to hear alternatives. It is sometimes amazing that professionals take the fast lane instead of studying all alternatives. You almost hear them thinking "It is a corporate expense, so...?"
You expect in good years professionals take more their time in selecting data providers by looking at quality and in bad years a similar research is done with the focus on synergies.
This will avoid in hard times cost cuttings put an end to certain valuable data receiving or they is simply no interest in knowing what adds or what is a waste. The corporate pressure on saving is higher than on long term value.
Now most of the downturn looks like to be behind, for the time being, it is interesting to study how professionals have been dealing with their challenges in regards to market data providers.
For example in case of financial or strategic planning decisions these last years, surprisingly, many have been using one source (data provider) only. Imagine in a downturn still relying on one opinion.
What causes that kind of strategy? Lack of interest in others? Avoiding changes? No maximum budgets?
As we do not consider the global leading market data providers as competitors I believe my following comments are not without arguments but I have no problem with mentioning one of them.
This is based on feedback from others and many of our clients use them as a source. I will not criticize their services but use them to show the difference between a single source and for example how we use a multi-view of sources.
One source only:
Besides planning our kind of data of the underlying economies in countries of interest in many cases come from the same source as the sector data.
Reasons are diverse; from administrative advantages to not knowing or willing to know the alternatives.
Some even claim only to need industrial information which depending on the role in the company I can agree with. Others, even worse than using one source, use free sources such as internet. Like out of date info or extra labor costs add more value.
When a demand planner or CFO of a Retailer uses for example Global Insight for their food sector analyzes included are macroeconomic data like forecasts. A combination (package) of sector and macro from one source.
Who is the expert?
Now I can imagine when analyzing for years a food sector you learn and you can become an expert. But an expert in food is different from an expert in economics. At a corporate level with a retailer you are probably a food expert. So, you should in fact already know more than others about your business.
The same is when studying economics and explaining the food sector. We do not do that for example. It is for both client and provider better to stay in your core business.
The past years I do not believe sector experts were able to predict better the markets than economists. Every one lacked the same visibility and for many countries / sectors this continues in 2010.
There might be exceptions but they were either not contacted, they were not seen as reliable or they were ignored. Otherwise the world would have looked different many times.
Too long too positive:
This is about logic. In good times, I was reading about an upturn of ten years before the last crisis emerged, it is easier to make your analyzes come through or realistic.
No one for commercial reasons will become critical about the markets of their clients and as long as it continues, let us keep the positive mood!
Imagine a global provider would completely turnaround a certain sector trend. It hardly happens, even not in for example stock markets. The risk is too high and clients are at stake.
The continuing positive mood is partly responsible for crisis in the Finance industry. In theory all sectors have had the same models of too optimistic ratings. Only Finance works faster than Food.
A close call was the Automotive industry. Merely because here besides an oversupply, we cannot digest more cars before economies recover or become profitable, the industrial leaders did an overkill themselves by too late reformation and innovation. Still there is a lot of resistance.
When looking at market research reports, besides links to alternative energy sources or smaller different cars, the world kept overwhelmed with weekly models.
That required analyst to write again reports (positive) and any other kind of PR necessarily to promote the new vehicle. Another example of keeping the statu quo.
Optimism is here again:
As said other sectors like food might not have had the same experiences from a business model but from a market research model they did.
Even though some countries look like to have escaped (
Again, I might have not read all reporting out there, but the point is that it is much easier to predict a positive market than a negative one. Even in a downturn.
When writing negative comments the chance your report is bought is lower than writing you have good arguments the momentum is changing.
This is accepted, maybe already since the industrial revolution, and it will probably not change fast. But what needs a change is predictions for macroeconomics. That is not similar to market or sector outlooks.
When counting we alone have more than hundred selected different opinions. Each month for 10-15 indicators per country. That comes to about 100,000 figures per month.
Still when it comes to a GDP or inflation forecast of BRIC, US, Canada, France, UK, Germany, Italy and other countries professionals prefer a single source like Global Insight.
The truth about forecasts:
I here can easily defend Global Insight because they seems to me in their field the best alternative but not when it comes to economic forecasts. For one and only reason:
Economic data cannot be relied on, economic forecasts are not realistic and economic forecasts are too vulnerable to take a brand identity for granted.
It is like years ago when they find out a chimpanzee had better investment rates than a group of highly trained brokers (from brand identity companies).
When we already receive for one indicator in
When they get closer the economy looks like to become more stable and with more differentiation the opposite, instability can occur. But nothing is certain in economics.
What is the price or value of trust?
So, where is the brand identity, the trust? Where when it comes to economic forecasts can be more received from Global Insight than others?
Can they like with stock markets constantly beat the average? Is there such outperforming available for economic forecasts?
Now before the last downturn in a period of for example five years it has been possible to come closer to certain economic predictions but not for emerging markets, only for developed ones.
Take for example the
When it comes to stock markets people decided that for any kind of advise or guidance final results cannot be relied on former or past performance. That has become a strict rule.
I believe that should be similar for all market analyzes or forecasts. Not only economic forecasts but for all kind of industrial predictions. Because who is finally going to be right? Do you get your money back when the results are worse than expected?
The fact professionals still choose for global providers such as Global Insight should only have a valuable reason, not a brand identity one.
Like for their clients this value has to be demonstrated in the current recovery from most bottom reached markets. This should be normal.
Purchasing without a reason:
Fortunately for them a lot of professionals see purchasing market data not as a valued corporate contribution. They purchase because they have to and because it worked. But does it mean there is no better alternative? When having one solution, the search for improvements stops?
Now for macroeconomic forecasts this model is changing I believe it will be changing too for any kind of sector information. On top were do business leaders take decisions based on one market scenario?
This will not threaten for example Global Insight but will give them and others the chance to adjust, to learn and to improve their services.
Professionals that purchase brand identity will always remain. But hopefully for their company this will change before the new uptrend is followed by another downturn.
Conclusion:
Looking ahead markets will get more complex and volatile. This requires value upgrades of data and separations of core and non core cannot be postponed because there are no longer more advantages than disadvantages.
Except for those who, when it comes to market data, do not care much about cost / benefits but they would not read this. I wonder if their management is aware of their lack of interest. Probably they will before the next downturn because nowadays getting a second chance is harder than before.
We are pleased to notice the downturn also has had the advantage of offer professionals a better priced alternative. By continuing improving and expanding we can even offer more of the same price-quality.
We might not become of the same sized brand identity like Global Insight or similar providers but we learned our customers do not care. They care about their company. Purchasing brand identity is still preferred. But for how long?
martes, 1 de diciembre de 2009
Request
Request:
This week I was asked to explain more about our company, what we do and where we distinguish ourselves. Referring to our website seems not always enough and I do prefer personal contact by sending some recent reports and exchange thoughts by phone later.
I decided to make an exception. In this blog normally I only would like to have an indirect motive to combine my opinion with my work.
Nevertheless it seems a lot of professionals have no idea what we do or what we do for their competitor, government, central bank or even university.
Lacking the time to make a real fancy article I decided to keep it simple. At the end it is simple;
We improve your macroeconomic forecasts data of 50+ countries world wide by offering more quality, creating costs and valuable time savings while our fees can be up to 90% lower than your alternatives.
Get your economic forecast differences in 2010!
One of the most difficult parts of economic forecasting is avoiding damage while having very high costs.
The past years due to the economic slowdown forecasts lost most of their value. All forecasting sources lacked visibility and 2010 looks like a bumpy ride. So, what is then left? Synergies?
When talking about economic forecasts in general people claim only to look at them once or twice a year. When dealing with domestic markets, a small business or in non management position this might be possible but not in a regional or global role.
Some firms are less hurt by fast economic changes but they still make costs of monitoring.
When dealing with for example financial/strategic/demand/ planning, treasury activities, management reporting, business decisions, international salary calculations, new market entries etc. this is absolutely more frequently.
The past years should have wake up professionals and increased their demand for better economic forecasting tools or at least more efficient ones.
The combination of no value and high cost in a downturn can no longer be ignored. Let’s have a look at how most companies deal with this kind of forecasts during a period of 12 months.
Alternatives for economic forecast data:
1. Companies use the same source for macro as for industrial specific / sector data; the large traditional global providers.
While it might look efficient to keep all under the same roof there is hardly any advantage, especially in the past years.
Why relying on a single source? Would you accept that when your Pension Fund is managed by one person?
Sure, it is easier to administrate or to get approval. But cost / benefits remain at a very low level and there are no extras such as savings.
In fact people need more time to separate industrial from macro while others to avoid one opinion only use extra core time on internet to find more forecasts.
2. Companies cancel all or most of their external data providers to save costs.
A good example of mismanagement; cutting subscription costs but creating more labor costs as people now have to do their own data searching and compiling.
Sure, cancel what you do not need but what you need, do not do yourself by inventing the wheel.
Here costs can increase with almost 100%. Being on the payroll is a definitive direct cost, even when having lesser personnel, extra hours are directly wasted and much higher than fees of external providers.
Labor cost example:
Professionals on an average look at a certain country economy (outlook, indicators, forecasts) at least one hour a week. A variety here can occur as some months might be more important but per month a total of 4-5 hours is easily reached.
As these man hours are coming from mid and higher management the average hourly salary would around US$ 50. This brings costs of only monitoring macro per year at US$ 3,000 for one person.
Excluded are risks of using wrong data and the total expense depends on the size of the company. But either having 100 or 10 people the costs are too much.
Conclusion:
Some do not care. They have a budget and they order without looking at the benefits. Purchasing a brand identity is easier than purchasing value.
Others see improvements as a threat or believe appointing the management of the differences cannot lead to positive contributions (for them).
When using data providers it is important to choose those that can really help. Look at the alternatives for example. What is overlapping and what has the best ROI for example?
Keep core data about your industry or sector separated. Besides your own internal knowledge it is easier to integrate than combine it with macroeconomics.
Do not underestimate macroeconomic data by copying it from free sources. Out of date information can do more damage than good. And stop wasting corporate time on own economic research. It is not your core business, so why getting paid or budgets for it?
On top of core business changes a difference can also be made for non core, such as economic data. Instead of extra costs this can result in cost savings up to 90% and time savings which can be used better for core activities.
As long as traditional providers do not add extras or can demonstrates their values in downturns people should keep looking for better alternatives and smarter spending.
Remember in good times it is easier to make results or develop research but has your company already left the uncertain market conditions? Are budget restrictions off line and cost cuttings are no longer necessary?
How will your company deal with costs and values of macroeconomics in 2010?
When you are interested FocusEconomics can demonstrate the difference in terms of labor costs and valuable time for macroeconomic data inside your company.
Remember no one can predict economies. Why then spending more than necessary?
For a special offer for 2010 please contact me at; moostveen@focus-economics.com
Please select from the following regions; Americas, Asia Pacific or Europe.
Thanks and good luck with the business in 2010!
This week I was asked to explain more about our company, what we do and where we distinguish ourselves. Referring to our website seems not always enough and I do prefer personal contact by sending some recent reports and exchange thoughts by phone later.
I decided to make an exception. In this blog normally I only would like to have an indirect motive to combine my opinion with my work.
Nevertheless it seems a lot of professionals have no idea what we do or what we do for their competitor, government, central bank or even university.
Lacking the time to make a real fancy article I decided to keep it simple. At the end it is simple;
We improve your macroeconomic forecasts data of 50+ countries world wide by offering more quality, creating costs and valuable time savings while our fees can be up to 90% lower than your alternatives.
Get your economic forecast differences in 2010!
One of the most difficult parts of economic forecasting is avoiding damage while having very high costs.
The past years due to the economic slowdown forecasts lost most of their value. All forecasting sources lacked visibility and 2010 looks like a bumpy ride. So, what is then left? Synergies?
When talking about economic forecasts in general people claim only to look at them once or twice a year. When dealing with domestic markets, a small business or in non management position this might be possible but not in a regional or global role.
Some firms are less hurt by fast economic changes but they still make costs of monitoring.
When dealing with for example financial/strategic/demand/ planning, treasury activities, management reporting, business decisions, international salary calculations, new market entries etc. this is absolutely more frequently.
The past years should have wake up professionals and increased their demand for better economic forecasting tools or at least more efficient ones.
The combination of no value and high cost in a downturn can no longer be ignored. Let’s have a look at how most companies deal with this kind of forecasts during a period of 12 months.
Alternatives for economic forecast data:
1. Companies use the same source for macro as for industrial specific / sector data; the large traditional global providers.
While it might look efficient to keep all under the same roof there is hardly any advantage, especially in the past years.
Why relying on a single source? Would you accept that when your Pension Fund is managed by one person?
Sure, it is easier to administrate or to get approval. But cost / benefits remain at a very low level and there are no extras such as savings.
In fact people need more time to separate industrial from macro while others to avoid one opinion only use extra core time on internet to find more forecasts.
2. Companies cancel all or most of their external data providers to save costs.
A good example of mismanagement; cutting subscription costs but creating more labor costs as people now have to do their own data searching and compiling.
Sure, cancel what you do not need but what you need, do not do yourself by inventing the wheel.
Here costs can increase with almost 100%. Being on the payroll is a definitive direct cost, even when having lesser personnel, extra hours are directly wasted and much higher than fees of external providers.
Labor cost example:
Professionals on an average look at a certain country economy (outlook, indicators, forecasts) at least one hour a week. A variety here can occur as some months might be more important but per month a total of 4-5 hours is easily reached.
As these man hours are coming from mid and higher management the average hourly salary would around US$ 50. This brings costs of only monitoring macro per year at US$ 3,000 for one person.
Excluded are risks of using wrong data and the total expense depends on the size of the company. But either having 100 or 10 people the costs are too much.
Conclusion:
Some do not care. They have a budget and they order without looking at the benefits. Purchasing a brand identity is easier than purchasing value.
Others see improvements as a threat or believe appointing the management of the differences cannot lead to positive contributions (for them).
When using data providers it is important to choose those that can really help. Look at the alternatives for example. What is overlapping and what has the best ROI for example?
Keep core data about your industry or sector separated. Besides your own internal knowledge it is easier to integrate than combine it with macroeconomics.
Do not underestimate macroeconomic data by copying it from free sources. Out of date information can do more damage than good. And stop wasting corporate time on own economic research. It is not your core business, so why getting paid or budgets for it?
On top of core business changes a difference can also be made for non core, such as economic data. Instead of extra costs this can result in cost savings up to 90% and time savings which can be used better for core activities.
As long as traditional providers do not add extras or can demonstrates their values in downturns people should keep looking for better alternatives and smarter spending.
Remember in good times it is easier to make results or develop research but has your company already left the uncertain market conditions? Are budget restrictions off line and cost cuttings are no longer necessary?
How will your company deal with costs and values of macroeconomics in 2010?
When you are interested FocusEconomics can demonstrate the difference in terms of labor costs and valuable time for macroeconomic data inside your company.
Remember no one can predict economies. Why then spending more than necessary?
For a special offer for 2010 please contact me at; moostveen@focus-economics.com
Please select from the following regions; Americas, Asia Pacific or Europe.
Thanks and good luck with the business in 2010!
miércoles, 25 de noviembre de 2009
Complex sale or buying complex?
During the last years it is remarkable how sales efforts are qualified. Old tricks are even sold as new breakthroughs while it is widely known making sales is no longer a trick every dog can learn but doing serious business.
Still at the buy-side responses are remarkable. Barking, biting and guarding the door are more common than looking for a serious B2B opportunity. How come?
It looks like buyers have an easier task but in fact most do not even care. As long as there is enough competition or demand can be facilitated without long negotiation, the buyer feels comfortable.
Now this is not about exceptions but about general sales. In general it is time to criticize buyers instead of always looking for apologizes from sellers. Who is really more aggressive, for example?
Yes, sellers should not be aggressive, unless it is a numbers game. Wrong but this is not about informing call centers how to fix that problem. A very interesting and easy solution is available but that is not the discussion here.
This is about buyers that represent (read: are on the payroll) of multinational companies. SMB’s cannot be excluded but this is about companies with a global interest (2 or more regions).
Whatever you sell them, you may call yourself fortunate when you have a real interest or someone taking the time. This partly can be affected by being a sales pro but there are limits. Limits made by the Buyer and often without reason.
A buyer that not only likes your product or service but really makes an effort, i.e. using well his or her position paid by his or her organization, is not common but exceptional.
Not the person that starts telling you that they already have your stuff or no longer have budgets. Or use words in their feedback such as “sufficient”, “satisfied” or even “happy”. Lucky for them their company is not affected by downturns!
Do they get training to say this or are they really not interested in improvements for the company? Or do they fear Sellers?
Some even believe they can decide for the whole company. "Sorry, but WE....."
It is not only wasting time for the seller, assuming her or she is prepared well and has indeed an additional value to offer and is well educated. This is also a missed B2B opportunity.
So, what is the value of giving excuses? What will add that to the company?
Instead of "nothing" the person, that should consider the purchase better, at least must give the seller the benefit of the doubt (unless your offer pencils to Staedtler, latest news to Reuters or printers to HP).
Now when you as a good sales person deal with these situations there are two options:
1. Moving on, ignoring, no further efforts, let them have a worse solution etc
2. Show some teeth.
Those who go for number 2 will have most of the struggle but also more success. First of all you do not have to eat them or scare them. You only have to be persistent and showing how dedicated you are.
There is nothing wrong with being determined and demonstrating where a buyer is mistaken or where he or she failed in the evaluation / decision process. The problem only is that hardly any one is really making that effort. Why?
Is it easier to go for number one? Does this not confirm the whole idea of distinguish yourself from a numbers game or competition?
According to research top annoyances of sellers are over aggressiveness and failure to listen. Really?
That is remarkable because why would a majority of Buyers choose these above a lack of preparation, a lack of follow through or a lack of product knowledge?
The answer is simple; top annoyances can only be created (by) when Sellers consider their prospects as numbers. For this you do not need preparation or knowledge. You just hammer them!
This has provided Sellers a bad name when you offer your products or services. There will always be the feeling “They want to sell me something” when contacting potential Buyers.
It also has not helped Sellers getting a better negotiation. Patience and less pressure on your sales cycle can be a better strategy to fill your pipe-line.
Now when looking at what impresses Buyers in this same research on top you find; thoroughness/follow-through, willingness to fight for the customers, knowledge of the customer needs, market / product knowledge.
In other words; when you are able to come close to the above Buyers are impressed. But are they also buying?
Without making further research concluding from the above Buyers mostly find themselves more important than their company. Otherwise best impressions should be Quality, Synergy and Price.
The impressions nevertheless are useful and praised but not by all Buyers. Partly this is understandable because who cares about what your company uses, wins in terms of cost and time savings or finally pays for? When being able to decide, you decide because of you.
The typical Buyer will also first look at his or her position. Does this decision undermine my power or status? Can this affect my career or promotion? Do I have to work harder now when using this product or service?
Buyers will of course deny but why would there be so many products and services on this planet? Is it not just to satisfy someone for a moment or that we stop thinking?
In fact in some industries it is all about brand identity. Local or small players have to use other instruments to get the Buyer’s attention. Often here is forgotten that Quality, Synergy and Price has no or hardly any value.
Imagine a manager or director who uses product / service A from a well known source. Would he or she do that because it is really better or because he or she feels more comfortable when sharing it with the higher management? Is impressing your management more important than the quality or contract details?
A contradiction is born. While this higher management urges for cost cuttings, savings and freezing budgets the company Buyers stop acting. Even those who normally appreciate better solutions. They now have the perfect excuse for any one who offers a B2B opportunity. Postponing has become the key.
This not only blows away bad proposals from aggressive sellers but also good proposals. Until the management declares the company is back on track or profits have returned Buyers will not even give you the benefit of the doubt.
Another contradiction as now it looks like only in good shape the company is willing to consider or use your products or services while many make the difference during hard times.
Fortunately there are exceptions from both Buyers and Sellers. But the essence is no longer what you have to do as a Seller to get the Buyer´s attention but what the Buyer should do with this attention. Then they can benefit all.
Making a Sale more complex is not the solution. Complexity is already there when the Buyer is not giving what he or she should give; a chance. Selling will remain the same with the same pros and cons and this is repeated over and over.
What now is needed is that Buyers become more open minded and really look what can help their organization, not only their own position. This is not as complex as it looks like. It should only be much easier to find both Sellers and Buyers at the same time and place with the same objectives.
Still at the buy-side responses are remarkable. Barking, biting and guarding the door are more common than looking for a serious B2B opportunity. How come?
It looks like buyers have an easier task but in fact most do not even care. As long as there is enough competition or demand can be facilitated without long negotiation, the buyer feels comfortable.
Now this is not about exceptions but about general sales. In general it is time to criticize buyers instead of always looking for apologizes from sellers. Who is really more aggressive, for example?
Yes, sellers should not be aggressive, unless it is a numbers game. Wrong but this is not about informing call centers how to fix that problem. A very interesting and easy solution is available but that is not the discussion here.
This is about buyers that represent (read: are on the payroll) of multinational companies. SMB’s cannot be excluded but this is about companies with a global interest (2 or more regions).
Whatever you sell them, you may call yourself fortunate when you have a real interest or someone taking the time. This partly can be affected by being a sales pro but there are limits. Limits made by the Buyer and often without reason.
A buyer that not only likes your product or service but really makes an effort, i.e. using well his or her position paid by his or her organization, is not common but exceptional.
Not the person that starts telling you that they already have your stuff or no longer have budgets. Or use words in their feedback such as “sufficient”, “satisfied” or even “happy”. Lucky for them their company is not affected by downturns!
Do they get training to say this or are they really not interested in improvements for the company? Or do they fear Sellers?
Some even believe they can decide for the whole company. "Sorry, but WE....."
It is not only wasting time for the seller, assuming her or she is prepared well and has indeed an additional value to offer and is well educated. This is also a missed B2B opportunity.
So, what is the value of giving excuses? What will add that to the company?
Instead of "nothing" the person, that should consider the purchase better, at least must give the seller the benefit of the doubt (unless your offer pencils to Staedtler, latest news to Reuters or printers to HP).
Now when you as a good sales person deal with these situations there are two options:
1. Moving on, ignoring, no further efforts, let them have a worse solution etc
2. Show some teeth.
Those who go for number 2 will have most of the struggle but also more success. First of all you do not have to eat them or scare them. You only have to be persistent and showing how dedicated you are.
There is nothing wrong with being determined and demonstrating where a buyer is mistaken or where he or she failed in the evaluation / decision process. The problem only is that hardly any one is really making that effort. Why?
Is it easier to go for number one? Does this not confirm the whole idea of distinguish yourself from a numbers game or competition?
According to research top annoyances of sellers are over aggressiveness and failure to listen. Really?
That is remarkable because why would a majority of Buyers choose these above a lack of preparation, a lack of follow through or a lack of product knowledge?
The answer is simple; top annoyances can only be created (by) when Sellers consider their prospects as numbers. For this you do not need preparation or knowledge. You just hammer them!
This has provided Sellers a bad name when you offer your products or services. There will always be the feeling “They want to sell me something” when contacting potential Buyers.
It also has not helped Sellers getting a better negotiation. Patience and less pressure on your sales cycle can be a better strategy to fill your pipe-line.
Now when looking at what impresses Buyers in this same research on top you find; thoroughness/follow-through, willingness to fight for the customers, knowledge of the customer needs, market / product knowledge.
In other words; when you are able to come close to the above Buyers are impressed. But are they also buying?
Without making further research concluding from the above Buyers mostly find themselves more important than their company. Otherwise best impressions should be Quality, Synergy and Price.
The impressions nevertheless are useful and praised but not by all Buyers. Partly this is understandable because who cares about what your company uses, wins in terms of cost and time savings or finally pays for? When being able to decide, you decide because of you.
The typical Buyer will also first look at his or her position. Does this decision undermine my power or status? Can this affect my career or promotion? Do I have to work harder now when using this product or service?
Buyers will of course deny but why would there be so many products and services on this planet? Is it not just to satisfy someone for a moment or that we stop thinking?
In fact in some industries it is all about brand identity. Local or small players have to use other instruments to get the Buyer’s attention. Often here is forgotten that Quality, Synergy and Price has no or hardly any value.
Imagine a manager or director who uses product / service A from a well known source. Would he or she do that because it is really better or because he or she feels more comfortable when sharing it with the higher management? Is impressing your management more important than the quality or contract details?
A contradiction is born. While this higher management urges for cost cuttings, savings and freezing budgets the company Buyers stop acting. Even those who normally appreciate better solutions. They now have the perfect excuse for any one who offers a B2B opportunity. Postponing has become the key.
This not only blows away bad proposals from aggressive sellers but also good proposals. Until the management declares the company is back on track or profits have returned Buyers will not even give you the benefit of the doubt.
Another contradiction as now it looks like only in good shape the company is willing to consider or use your products or services while many make the difference during hard times.
Fortunately there are exceptions from both Buyers and Sellers. But the essence is no longer what you have to do as a Seller to get the Buyer´s attention but what the Buyer should do with this attention. Then they can benefit all.
Making a Sale more complex is not the solution. Complexity is already there when the Buyer is not giving what he or she should give; a chance. Selling will remain the same with the same pros and cons and this is repeated over and over.
What now is needed is that Buyers become more open minded and really look what can help their organization, not only their own position. This is not as complex as it looks like. It should only be much easier to find both Sellers and Buyers at the same time and place with the same objectives.
lunes, 16 de noviembre de 2009
Why the economy can be blamed instead of bad management.
Why the economy can be blamed instead of bad management.
The past twenty months or so and in current corporate reporting the executive branch uses the economic downturn and some pickups in regional economies as arguments for not being able to give full year or quarterly guidance to share and stakeholders.
First of all there is not much they can do about it. These recoveries are fresh and in many countries too small to even call it a recovery. Some countries are excluded but exceptional companies when it comes to avoiding economic risks are hard to find.
So far understandable and the guidance from executives will remain without a clear vision for the time being. This might slightly improve but as limited is this outlook is also the ability to predict corporate results for 2010 and even beyond.
Secondly it seems when it comes to economic risks for many this is still not related to the real economy but only an easy phrase or excuse. Based on first hand communication with several business leaders world wide, especially those with a focus on emerging markets and BRIC markets, improvements or needs of more quality data / information are not a priority (of their management).
Too often professionals using macro for completing market analyzes, for making business decisions, supporting management meetings, doing internal reporting or using the data as a strategic or financial planning tool they rather rely on one source only. In most cases the same source used for industry specific data.
This is very strange and also kind of worrisome. Imagine this is also done for Pension Funds or IT Security. Billions invested in only one stock, for example Walt Disney, a good example when discussing fairy tales or economic forecasts of one source. Using one provider for IT Security will give them a lot of power.
Companies are crowded by advisers, especially coming from banks and other financial institutions. Mostly external ones get paid heavily for sharing an opinion that is different from any other. Does this not look familiar when talking about economic opinions? All these opinions from IMF, World Bank, OECD, central banks, governments, corporate economists, experts, gurus etc?
We all know they are all wrong but these same advisers work with institutions which have their own economists. Again each divided about any economic country trend. No one can really outperform because all face the same interference from political, social, demo-graphical or other kind of instability, disturbance or equal phenomenon.
So, why then relying on one source? Or is economic guidance no longer helping the company? Why mentioning economic reasons of slowing down your results or using recovery signals as hope for a short term revival?
A third argument that contributes to blaming the economy, and not taken economic risks (more) serious, instead of blaming management are the claims of having sufficient information or teams doing already economic analyzes.
Does sufficient indicate no other data can be better and therefore ruling out economic risks? Does sufficient cover for bad management decisions? Since when next to your global leadership in the food sector your core business involves macroeconomic research?
And when internal teams do these analyzes should that justify no other analyzes can be better? Justified how? In costs? Savings? Better guidance?
Unfortunately when looking at the above many companies still seem not to worry about economic risks and find it an easy way to blame their bad management. They keep on relying on one provider, they do not care about the quality of available information and do not consider non core business corporate time as a problem for cutting core business time (including labor expenses rising).
The worst of worst is the decision of budget restrictions. No, we are not interested in cutting costs by 90%. Sorry, our management blames the economy, not me.
Too simple would also be the explanation of missing realistic forecasts. Like as no one can make them, why arguing about them? While it is true this pure outlook cannot be given it does not exclude improvements. Especially not when paying too much, spending too much or not benefiting from synergies.
What will these companies do the coming years?
They will keep on blaming the economy for the bad results instead of bad management. They will continue cutting costs but only the easy core ones. Oeps, another restructuring charge. They will reorganize in the hope to attract better managers instead of better instructions. But as budgets will remain under restriction, good people will leave the company, competition benefits etc.
But they mostly will fail because those who do not take economic risks serious by focusing only on core business or do not demand full concentration of its employees on core business and those who believe one source is enough to guide them through rough times will miss a lot of opportunities for improvements.
These opportunities can only be discussed when the decision maker is truly identified, is open minded and is interested in business deals. Not someone who is only interested in his or her own position. Because then we only hear and see the same excuses over and over again, the economy is again blamed for not being able to make a corporate change.
This can easily be measured in labor costs. For every manager, analyst, director or corporate leader monitoring the underlying economic trends of countries of interest a process is needed. Either someone delivers them internally a report or this report is purchased directly.
People do not like reading but most reporting is useless when not using the best tools. Lots of corporate value time is lost when stopping searching for these tools. Every process of macro data is therefore an underestimated cost and time inefficient process when using one source or counting on own research.
On an average at least one hour per week people read about economies. Not to study but just a number or country report. Based on an average corporate salary per year this reaches easily 2,000 US$. Multiplied with an average of 10, 20, 50, 100 or more people, depending on company size, these costs are a waste of assets and valuable time. Big companies loose 100/200K while for smaller 10/20K is acceptable.
Excluded here from better data and cost / time efficient tools are the positive effects on eliminating risks, recognizing better economic trends, better prepared for internal and external meetings, more core corporate business time available and more core corporate budgets available.
Including these last items for missing revenues or miscalculations losses can reach millions.
When that is not of an interest, it is clear why economic risks are not taken (more) serious and why the economy is only used to cover up mismanagement.
The past twenty months or so and in current corporate reporting the executive branch uses the economic downturn and some pickups in regional economies as arguments for not being able to give full year or quarterly guidance to share and stakeholders.
First of all there is not much they can do about it. These recoveries are fresh and in many countries too small to even call it a recovery. Some countries are excluded but exceptional companies when it comes to avoiding economic risks are hard to find.
So far understandable and the guidance from executives will remain without a clear vision for the time being. This might slightly improve but as limited is this outlook is also the ability to predict corporate results for 2010 and even beyond.
Secondly it seems when it comes to economic risks for many this is still not related to the real economy but only an easy phrase or excuse. Based on first hand communication with several business leaders world wide, especially those with a focus on emerging markets and BRIC markets, improvements or needs of more quality data / information are not a priority (of their management).
Too often professionals using macro for completing market analyzes, for making business decisions, supporting management meetings, doing internal reporting or using the data as a strategic or financial planning tool they rather rely on one source only. In most cases the same source used for industry specific data.
This is very strange and also kind of worrisome. Imagine this is also done for Pension Funds or IT Security. Billions invested in only one stock, for example Walt Disney, a good example when discussing fairy tales or economic forecasts of one source. Using one provider for IT Security will give them a lot of power.
Companies are crowded by advisers, especially coming from banks and other financial institutions. Mostly external ones get paid heavily for sharing an opinion that is different from any other. Does this not look familiar when talking about economic opinions? All these opinions from IMF, World Bank, OECD, central banks, governments, corporate economists, experts, gurus etc?
We all know they are all wrong but these same advisers work with institutions which have their own economists. Again each divided about any economic country trend. No one can really outperform because all face the same interference from political, social, demo-graphical or other kind of instability, disturbance or equal phenomenon.
So, why then relying on one source? Or is economic guidance no longer helping the company? Why mentioning economic reasons of slowing down your results or using recovery signals as hope for a short term revival?
A third argument that contributes to blaming the economy, and not taken economic risks (more) serious, instead of blaming management are the claims of having sufficient information or teams doing already economic analyzes.
Does sufficient indicate no other data can be better and therefore ruling out economic risks? Does sufficient cover for bad management decisions? Since when next to your global leadership in the food sector your core business involves macroeconomic research?
And when internal teams do these analyzes should that justify no other analyzes can be better? Justified how? In costs? Savings? Better guidance?
Unfortunately when looking at the above many companies still seem not to worry about economic risks and find it an easy way to blame their bad management. They keep on relying on one provider, they do not care about the quality of available information and do not consider non core business corporate time as a problem for cutting core business time (including labor expenses rising).
The worst of worst is the decision of budget restrictions. No, we are not interested in cutting costs by 90%. Sorry, our management blames the economy, not me.
Too simple would also be the explanation of missing realistic forecasts. Like as no one can make them, why arguing about them? While it is true this pure outlook cannot be given it does not exclude improvements. Especially not when paying too much, spending too much or not benefiting from synergies.
What will these companies do the coming years?
They will keep on blaming the economy for the bad results instead of bad management. They will continue cutting costs but only the easy core ones. Oeps, another restructuring charge. They will reorganize in the hope to attract better managers instead of better instructions. But as budgets will remain under restriction, good people will leave the company, competition benefits etc.
But they mostly will fail because those who do not take economic risks serious by focusing only on core business or do not demand full concentration of its employees on core business and those who believe one source is enough to guide them through rough times will miss a lot of opportunities for improvements.
These opportunities can only be discussed when the decision maker is truly identified, is open minded and is interested in business deals. Not someone who is only interested in his or her own position. Because then we only hear and see the same excuses over and over again, the economy is again blamed for not being able to make a corporate change.
This can easily be measured in labor costs. For every manager, analyst, director or corporate leader monitoring the underlying economic trends of countries of interest a process is needed. Either someone delivers them internally a report or this report is purchased directly.
People do not like reading but most reporting is useless when not using the best tools. Lots of corporate value time is lost when stopping searching for these tools. Every process of macro data is therefore an underestimated cost and time inefficient process when using one source or counting on own research.
On an average at least one hour per week people read about economies. Not to study but just a number or country report. Based on an average corporate salary per year this reaches easily 2,000 US$. Multiplied with an average of 10, 20, 50, 100 or more people, depending on company size, these costs are a waste of assets and valuable time. Big companies loose 100/200K while for smaller 10/20K is acceptable.
Excluded here from better data and cost / time efficient tools are the positive effects on eliminating risks, recognizing better economic trends, better prepared for internal and external meetings, more core corporate business time available and more core corporate budgets available.
Including these last items for missing revenues or miscalculations losses can reach millions.
When that is not of an interest, it is clear why economic risks are not taken (more) serious and why the economy is only used to cover up mismanagement.
miércoles, 21 de octubre de 2009
"It's the economy, stupid"
"It's the economy, stupid" was a phrase in American politics widely used during Bill Clinton's successful 1992 presidential campaign against George H.W. Bush.
The recession at that time cannot be compared to the current one (in size and matters) but when looking at corporate campaigns the phrase has lost a lot of value.
Corporate spending on information has drastically been reduced as part of a total cost cut. This looks relevant and necessarily but what about economic intelligence?
Since May experience learn a lot about corporate spending behavior. Where outlooks remain grey and lacked with visibility it is not a surprise budgets for information have been cut.
Market conditions still show a volatility that should keep professionals informed of the potential business opportunity, even the smallest, which world wide is much decentralized.
This requires more time and stress testing to make sure when getting back into markets risks remain under control as far as possible.
Professionals in prosper times easier can make decisions as market conditions remain profitable but why not exploring better tools in desperate times?
To answer this it might be a false accusation but is it logical when economic outlooks are missing any visibility to continue with existing data providers or tools?
What makes decision makers decide to maintain essential economic information to support operations while the past 12 months no additional value was seen?
There can be five explanations for these questions:
1. They simply do not care or miss time to care. Business leaders, although referring to the economic impact on corporate development, do not look at macroeconomics or find them relevant in their decisions. They have other priorities.
This can be true because at certain levels, at the top, there is not time to monitor every country of interest. But what about lower levels of corporate finance & control, strategic planning, business development, market intelligence etc?
Why would in these departments managers not consider more effective tools for macroeconomics?
2. They leave these decisions up to their teams. Why would professionals not inform their upper management of possible improvements?
3. Only in good times it is allowed to spend on secondary information, such as macroeconomics. In other words when there is a budget left over.
4. A change would implement extra attention and labor to make the change successful. The fear of a change to distract people and learn another tool seems to override the potential benefits.
5. As discussed in other blogs it is fear itself of making a wrong decision. Rather no changes than any change that can jeopardize someone’s position.
Combining the above it still does not justify not welcoming improvements in terms of less spending, more time efficiency and overall benefits for each employee using macro to complete micro. What happens when nothing changes?
1. Total costs remain at the same high level or are even increased. While with current information providers discounts could be achieved any kind of synergy will be missed as long as additional benefits cannot be integrated.
2. Besides costs such as fees labor expenses are often higher because not all employees have access and need to find alternatives (internet is the worst alternative). People often forget to be on the pay roll.
3. Costs of risks cannot be calculated but when not improving any efficiency level operational results will rather decline than remain stable. Professionals in downturns often face higher work pressure and risks will be higher.
What can happen when making the right changes?
1. Total costs will be reduced as no longer (over) expensive and overvalued information providers are used or new tools are added to compensate them.
2. Corporate time savings will lead to lower labor expenses. As people have more time for core business, core business will directly benefit which increases the ROI.
3. Less stress and better time management can help risk assessments in for example market analyzes, financial reporting or strategic planning. Even business decisions are better supported.
Conclusions;
Instead of walking away from changes or being afraid of them it is better to consider them. It is too easy to claim satisfaction or sufficient access to available alternatives.
The past period has learn there is no such thing as “security”. When not being open for change will harm your corporation. It is then no longer the economy but corporate inefficiency, stupid!
Suscribirse a:
Comentarios (Atom)