Category Archives: Marketing

Dear Vendor Rep, when you hear “We have trouble … ” You SHOULD NOT assume the individual wants you to sell them whatever your closest solution is. NEVER!

Another Friday. Another dozen topics to rant about. But one has to surface to the top, and this week, it’s the circulating documents and advice on LinkedIn on what a vendor sales rep should say when a potential customer says “X”. I don’t want to get to specific, and inadvertently call people out (although I may if I see a continued push for this nonsense), but needless to say, as this is a Friday, and another rant, the “advice” being given is entirely wrong and total BullSh!t! And I’m sick of it, and as a potential customer, you should be too.

As an example, and this is not necessarily a specific example, I’ve been seeing advice along the lines of:

If a potential customer says “we have trouble managing our inventory and/or raw materials

Then a vendor rep should hear “our business could be stalled or halted if we don’t have what we need to satisfy our customer demand, produce our products, or run our production lines” and “therefore, I want inventory management, product tracking, and or storeroom/warehouse management software and I want it now“.

And then that vendor rep should identify their most appropriate software solution or platform and say “our Gruntmaster 6000 module is exactly what you are looking for as it tracks your inventory on-hand by quantity and location, as well as in process by lane and supplier, lets you assign it to builds and customers, and gives you an accurate picture of what you have on hand and when you will need to restock and even prompts to re-order” …

H3CK NO! ( Get lost, Phil. )

As another example, if a potential customer says “we are in immediate need of Procurement cost savings

Then a vendor rep should hear “if we don’t get a cutting edge e-Sourcing or e-Procurement solution ASAP we are going to get fired so, please, find us one, no matter what it costs

And then that vendor rep should identify their most appropriate software platform and say “our new Ovation Sourcing Suite, running on the new-and-improved Phantom operating system, is exactly what you need as it will save your organization at least 10% annually on your addressable spend, which we estimate to be 400M based on your current spend profile, so you can easily afford the low, low, annual license cost of 4M

AGAIN, H3CK NO! (Phil, we’re warning you!)

In neither situation does the individual want a sale. They want a solution, but that’s not a sale, and not necessarily even a piece of software.

Specifically, they want to understand what their problem is, why they are having the problem, what processes could be changed to prevent the problem, and only then what a solution needs to be in order to help them (and they want to understand what they need before they are asked to judge a solution, and how valuable that solution really is). At least if they are an individual with independent thought who wants to remain that way. (the doctor does realize that there are apparently quite a few individuals [numbering in the thousands] who would rather just belong to a cult of savings and/or a cult of technology and that there is at least one predatory vendor out there that seeks these customers out and actively convinces them to repeat the “savings” mantra until they buy in and join the cult. But there are still quite a few individuals who may eventually want your technology who abhor cults and want to retain their individuality.)

Thus, when a customer says “we are in immediate need of Procurement cost savings

What you should say is “we need to do something or our jobs are on the line, but we don’t know what and we need some guidance

And before you give them a single word of guidance, you should ask, not say, ask “why, what’s your reasoning, and where do you think that savings could come from“.

If the reason is “the boss said if we don’t cut the costs he’ll cut our jobs“,

then you should say “okay, so your boss thinks you are overspending — that may or may not be the case in the current economic and supply chain environment; the first thing you should do is a category-based spend analysis against market benchmarks to identify where your spending is, and whether any savings is likely in each category with significant spend; then, based upon any identified opportunities, you need to determine the best way to capture those savings which could be renegotiating with contracted suppliers (in exchange for a longer term), putting spot-buy suppliers under contracts, or going to market with a (multi-round) RFP

and only then should you say, “now, if you would like us to help, we offer a spend analysis tool if you can do the analysis yourself and/or [guided] spend analysis services and/or we partner with consultancy CCA who can help you with the analysis; then, if you determine that you need RFP technology, we have an advanced sourcing product that could be a perfect fit, and if you determine (re-)negotations are the big problem, we also have a contract management solution/integration with negotiation support that many of your peers have said works great in those situations; we’ll reach back out in x weeks, which is about how long the initial analysis should take, but if you get answers sooner we’re here to help

Not only will the potential customer respect you, but you will be their first callback as soon as they know what they need, and if they can skip an open RFP process in their technology selection, it’s likely you will be their first choice because they want a vendor who will listen to them, understand their problems, help them identify the root cause and the necessary processes changes and improvement, and ensure that any solution they buy is one that’s actually appropriate to their situation and one they can use. And this will be true even if your solution costs more because they are looking first and foremost for a vendor that will help them achieve the promised ROI, not just promise them one (or insist they drink the kool-aid). (Please don’t sip the Kool Aid.)

The situation for the inventory example is similar. Almost every manufacturer has an MRP, and knows what they are buying/using, so it’s likely their inventory issue is a process issue, possibly exacerbated by a lack of integration between systems, or a lack of visibility into forthcoming production plans. Similarly, every organization knows what they buy, it’s on the PO, and they know what is shipped, it’s on the ASN, and if they have a no-receipt, no-pay policy, they know they should have received what was in the ASN. But chances are there is no counting, or ASN override, when receipt is verbally acknowledged (and a buyer keys in a single “Y” when the warehouse clerk says “yeah, we got it“), no connection between the procurement system and the inventory system, no identification of where the product is stored, and no indication of whom the product was intended for.

In other-words, they probably don’t need an inventory system, they probably need an integration solution/module that connects the systems, consulting on best practices to help them get the processes right, and auxiliary modules for sales tracking or integration into sales so the inventory is properly allocated.

They may still need your solutions, but they need your knowledge first, and if you offer the right services, possibly need your consulting, more.

Remember this before you take that bad advice to lay right into an inappropriate sales pitch. At least if you want them to want you. (They don’t want a Cheap Trick anymore.)

Still Using Product Photography to Drive Sales? Part II

Today’s guest post is from Brian Seipel, a marking project expert at Source One Management Services focused on helping corporations achieve both Marketing and Procurement objectives in their strategic sourcing projects.

While this guest post is a bit off of the beaten path for SI, it’s a very interesting one and relevant for those Procurement professionals that want to run with the marketing bulls.

Five Ways Rendering will Beat Out Photography

In Part I, we noted that rendering needed to be “as good” as a photograph for organizations to ditch photography, and for this to happen, rendering needs to offer more. What is the “more” that is needed?

Here are several examples of what “more” means in this sense:

  • Perfect conditions – every time. Let’s face it: there are plenty of elements of a photo shoot that can (and will) go wrong. This is especially true of outdoor shoots or tricky products. Think of Breyer’s next “ice-cream-cone-on-a-hot-summer beach” ad. With rendering, you control all aspects of the environment, leaving nothing to chance – bad weather can’t shut down your rendering, and there’s no hot sun to melt your product.
  • Don’t like it? Change it. Another reality of product photography is its element of permanence. Once a shoot wraps, it is over. Small-scale changes may be possible in post-production, but also may incur additional charges. Larger changes will require a costly reshoot. Rendering provides the flexibility to make changes right up until the point you have your perfect image.
  • Rendering goes where photography can’t. Imagine filming a fly-through of the many intricate elements of a watch, with the viewer flying over the watch face and delving deep into the watch’s moving inner gears. Imagine this watch transitioning from a solid object to an exploded view, showing how a thousand individual components come together to form the whole – all while still ticking away and moving in time. These are powerful ways to showcase a product, but creating them with traditional photography or videography would be a struggle at best. With digital rendering, achieving these views is no more difficult than capturing a standard image.
  • Entrée into augmented reality. Just how far augmented reality will go in helping an organization reach customers is still an unknown. However, definite marketing plan synergies exist by developing a rendering that could not only replace a photograph but also feature in an augmented reality app.
  • Rendering keeps getting more cost-effective. To be clear, rendering may still be expensive depending on what work you need done. However, the fast pace of advances in this area have dramatically cut costs to the point where many organizations see a direct financial benefit to making the move. Photography costs are much less flexible – the costs related to studio space, product and equipment storage, and prop warehousing will always be present. Even though photography equipment keeps getting better, staying on the cutting edge of hardware still requires a large outlay of cash for studios, which is passed onto customers in every shoot.

Is Rendering Viable Now?

Given the speed at which technology is moving and just how lifelike the results are becoming, a transition to rendering from photography will, for many organizations, be a matter of “when” and not “if.”

So, at what point is this switch viable? For many organizations, this is a judgment call. For many, rendering can achieve results faster than photography and at a better price point. For others, rendering supplements photography to achieve results that traditional production can’t.

Thanks, Brian.

Still Using Product Photography to Drive Sales? Part I

Today’s guest post is from Brian Seipel, a marking project expert at Source One Management Services focused on helping corporations achieve both Marketing and Procurement objectives in their strategic sourcing projects.

While this guest post is a bit off of the beaten path for SI, it’s a very interesting one and relevant for those Procurement professionals that want to run with the marketing bulls.

Still using product photography to drive sales? Why there may be a better way!

Pictures are certainly worth a thousand words when it comes to products sales, and well-shot product photography is a key aspect of many sales and marketing budgets. Many organizations recognize that those “thousand words” are the least of their worries, however – those pictures are worth a large chunk of their budgets as well. In fact, the higher-end or more physically detailed the product is, the more organizations can expect to pay for a proper photograph.

Any organization operating in the luxury space has likely asked the question, “Do we really need to put so much money towards product photography?” Unfortunately, the answer has always been a resounding “yes” from Marketing – until, perhaps, now. As with all areas of business, technological advances are offering a clever disruption to the product photography space.

Digital Rendering: The Product Photography Killer?

Many organizations are either turning to, or considering a test run of, digitally rendered images to replace product photography. In a nutshell for those unfamiliar, a rendered image is one generated entirely from a computer. Without going too deep into how rendering works, here is a brief overview:

  • The Wireframe: To start, we need to build a model of a product. The wireframe defines the shape of an object by taking a 2D or 3D drawing and developing it into a digital model.
  • The Skin: At this point, the model alone has no form. Typically, this empty “space” is represented visually as a simple set of intersecting lines (hence the name “wireframe”). The skin, or texture, applies visual characteristics to the model. Consider a product made with both white gold and brown leather – two materials that are very visually different. The gold would be light, smooth, and highly reflective. The leather would be rough, rich in dark color, and non-reflective. All of the attributes of these materials must be perfectly reconstructed in a digital environment.
  • The lighting: When a product photo is taken, excruciating attention is paid to creating a compelling lighting setup. Lighting is used to evoke specific emotional reactions or showcase key elements of a product. This is just as true for rendering – lighting sources have to be both created (how bright, focused, and warm or cool the light source will be) and directed at the model (determining what direction light should come from, and how many sources are needed to effectively light a product).

Think about any Pixar movie you’ve ever seen – these are beautiful examples not just of rendering, but also a fair representation of just how far advances in rendering have come. As amazing as they seemed to us when they first hit theaters, early digitally rendered movies look crude by today’s standards. The pace of development is moving extremely fast, thanks to refined techniques, better digital tools, and more powerful computer platforms to run them on. In fact, it is becoming extremely difficult, if not impossible, to discern a photograph of a product from its comparable rendering.

But it isn’t enough for a rendering to be “as good” as a photograph. For organizations to ditch photography, rendering needs to offer more. And it will. How? Come back for Part II.

MBAs, Here is Why You Have to Support Procurement!

You have to support Procurement because this is the next big thing78. You might still be engrossed in the ad-driven world created by the marketing mad-men that can drive mega-sales when done right, but face it, there is only so much revenue to be gained from incremental sales with a 3% margin. But Procurement, this is the real low-hanging fruit74. Sales would have to double to add the same amount to the bottom line as Procurement could add if it simply took an extra 3% off of the lifecycle cost for a product with a 3% margin. Given that Sales doesn’t have the bandwidth11 to double sales, and Procurement always has the bandwidth to shave off a few percentage points on the right categories, the choice should be obvious.

Let’s face it, you need a few quick wins75 — and what better place to get those wins then with a new initiative that can deliver real ROI5 with relatively minimal investment. In fact, Procurement is a cash cow25 that is typically undernourished and one, that if it dies of starvation, could take the business with it. Face it, it’s the one part of the business whose primary focus is to not leave money on the table.

Yes, you need to be a team player8 with more than an open door58 policy. You need to tear down the silos internally47 to get things done, but remember, it’s all about synergies26 and you are a self-proclaimed agent of change42. Plus, once costs are under control, data driven2 Procurement will go back and sharpen their pencils, think outside the box10, and when more immediate savings are not immediately identifiable, focus on value-add63 and look for ways to get more for less.

Maybe you have to manage the optics18 of what you do, and maybe you will need to initiate some creative destruction19, but the savings and value generated are scalable61, applied to every unit. Best-of-breed62 organizations are best in class in Procurement. (In fact, every year they will take at least 4% to 6% off of the entire bottom line when properly supported. That’s a huge number!)

In fact, Procurement can bring about a paradigm shift1 in the organization. It might be tough to wrap your head around3, but it’s true. We can ballpark the opportunity6 easily. Going back to our example above and peeling the onion87, if the category sells 10,000 units at 100 each, the organization takes in 1,000,000 in revenue and makes $30,000. If aggressive marketing could increase sales 20%, the profit would be $36,000. But if Procurement, with the same investment, could decrease costs by 3%, the profit would be $60,000. How could you not want to run with this89?

We realize we’re not quite comparing apples to apples86 here, but at the end of the day32, if you step up to the plate27, square the circle24 between organizational units, it will be a win-win4 for everyone and no one will be stuck putting lipstick on a pig34. When you cross the chasm14 and sail into that blue ocean14, the bottom line will go from good to great14 and inflate as you pass the tipping point14 and you will definitely want to run with it89.

And if you don’t think it will move the needle48, we have four words for you: Supply Chain Top 25. Deal with it.21 You don’t need to do a SWOT analysis30 to realize that the answer to the 64,000 question23 that if you want to monetize29, the fastest way to increase profit is decrease costs. It’s a strategy that is more than actionable enough53, one you should incent41, but the net of it is13 you will come out ahead. When the rubber meets the road12, results oriented36 Procurement wins. So, going forward57 be a visionary7 and support Procurement. My 2 cents is54 that if you give Procurement the support they need, you can phone it in88 and still win big.

A big shout-out to Eric Jackson of Ader Investment Management who took the time to compile the brief dictionary of the MBA language for the rest of us who like to stay in the trenches90.

Also, if you select text the last two posts, you will see that we used every key phrase of the MBA language, so this should help you, as a practitioner, get their attention.

MBAs, Sourcing Innovation Feels Your Pain!

MBAs, let’s address the elephant in the room77. You’re drinking from a firehose65 right now while burning the candle on both ends60. It’s a perfect storm31. Profits are down, your visibility into the quarter is a little fuzzy37, and you don’t want to get thrown under the bus71. The organization is going through a re-org84 in an attempt to right-size16 and correct the perception, right or wrong, that there were too many Chiefs and not enough Indians56.

By way of housekeeping22, you know you need to increase mind-share with the customer85, but you don’t have enough boots on the ground20 to scale your marketing efforts. You need to treat the big deals as one-offs40, but you are facing some headwinds39 with the COO who wants to standardize. You need to put your game face on69 and manage expectations52, but you don’t know what to do and you don’t want the R33. But if we take the 30,000 foot view50, unless you want to be re-org’d out, you better take the R33.

Hope is not a strategy46, but you think that’s all you have. You don’t know the next steps73 or the competition killer76 that will allow your organization to move up and to the right83 and regain its profitability and its fame. You don’t have a go-to-market64 strategy, any paradigm shift1 would be outside your core competency38, and you don’t know what your next deliverable81 is.

But it doesn’t have to be that way. If you eliminate the ready, fire, aim45 approach, put a stake in the ground35, remember the old 80-20 rule51, put aside the basic blocking and tackling68, and do a level-set67, you’ll realize there is a radical solution. Procurement.

And while it’s good to put a face to the name49, it’s even better when you realize that it is the next-generation, turn-key, plug-and-play17 solution that will finally deliver the ROI5 you’ve been searching for. Sure you will get some push-back66 when you suggest it for the first time, but Procurement has it covered from soup to nuts70. Of course you should do a little more due diligence there43, but Procurement really is the cash cow25 you’ve been searching for.

And while you can expect that Marketing will sound like a broken record55 when you bring this up and continue to push their agenda, you need to circle back to that9 later, push your agenda, and loop them in82 when they are ready to cooperate. Once you’ve done your research and identified leading organizational best practices80, you’ll know that Procurement is the way to stop leaving money on the table44 and close the loop72 on organizational success.

There’s a reason that strong Procurement support has gone viral59 in leading organizations and that’s because Procurement’s constant quest for value-add63 increases profits. And while previous business fads have failed, this time its different79 because Procurement has to eat its own dog food28 and is very incentivized41 to buy premium.

MBAs, be sure to come back tomorrow as we explain, in your language, why you have to support procurement.