The largest corporations have the toughest issues because they have more people, processes and channels to deal with. The pressure is to process and policy themselves to success, because they can't just sit down and talk to a couple of employees and solve a problem like a small company could do.
I read that a corporation wanted to make things "meaningful" to its reps, employees and suppliers. I think that's a good start. Whatever we do should have meaning. But that's still not enough.
Something can make sense and have meaning, but that doesn't mean we'll do anything about it. A person may understand the importance of say, a playoff game in the NFL. If the team doesn't win, they're done for the season. But that doesn't mean that person will attend the game or even watch on TV.
The same with an initiative at a corporation. Employees may understand it. Maybe they think it has meaning for the enterprise. But does that employee care enough to do anything about it? Is he or she buying in?
We need more than meaningful communications. We need to engage our suppliers, employees and reps, they need to want to play a key role. That's the challenge - and we can't let go of it.
Barry LaBov
LaBov and beyond
www.labov
Tuesday, September 29, 2009
Monday, September 28, 2009
It's a New Day...Again
I walk into a client's office. He tells his team how they are changing processes, that everything will be different. He declares, "It's a new day."
Eight months ago, his predecessor addressed her troops. She shared news of cost-cutting moves, RIFs and pay reductions and declared, "It's a new day."
Two years prior, the head of the same division stated to employees in a town hall that things needed to change. "It's a new day," he told them.
This has been a new day for years. I think we'll be having new days for years to come.
Our challenge as communicators is to help our employees, suppliers and dealers buy in to the fact that every day is a new day, that we all have to continue being hungry, focused and better than the day (the old new day) before.
Barry LaBov
LaBov and Beyond
www.labov.com
Eight months ago, his predecessor addressed her troops. She shared news of cost-cutting moves, RIFs and pay reductions and declared, "It's a new day."
Two years prior, the head of the same division stated to employees in a town hall that things needed to change. "It's a new day," he told them.
This has been a new day for years. I think we'll be having new days for years to come.
Our challenge as communicators is to help our employees, suppliers and dealers buy in to the fact that every day is a new day, that we all have to continue being hungry, focused and better than the day (the old new day) before.
Barry LaBov
LaBov and Beyond
www.labov.com
Friday, September 25, 2009
(Lack of) Communication and Control
There are many mysteries in business. One is why a person doesn't communicate frequently; you know, the person you have to track down to get an update from.
You'd think that with all the technologies available, that we'd be communicating more than ever - you can phone, meet in-person, email, drop a note, even send a text message.
It doesn't matter if a dozen new communication technologies are created tomorrow, people will still avoid communicating for a number of reasons, including control.
If you don't let your co-workers or boss know the status on a project, you're in control. Maybe you're more important, because you're the center of conversation - "Has anyone heard how such and such is going?" If you don't give updates to your clients, they'll need to track you down. It's about control.
But, control is elusive. Once the non-communicator is tracked down, the situation may get contentious, the project may be at risk, etc. They'll be tempted to be even more non-communicative.
The best communicators, the most confident and the most successful, communicate openly and succinctly to the right people - frequently. They have the confidence that information and updates will help their team achieve success. For them it's about success, not control.
Barry LaBov
LaBov and Beyond
www.labov.com
You'd think that with all the technologies available, that we'd be communicating more than ever - you can phone, meet in-person, email, drop a note, even send a text message.
It doesn't matter if a dozen new communication technologies are created tomorrow, people will still avoid communicating for a number of reasons, including control.
If you don't let your co-workers or boss know the status on a project, you're in control. Maybe you're more important, because you're the center of conversation - "Has anyone heard how such and such is going?" If you don't give updates to your clients, they'll need to track you down. It's about control.
But, control is elusive. Once the non-communicator is tracked down, the situation may get contentious, the project may be at risk, etc. They'll be tempted to be even more non-communicative.
The best communicators, the most confident and the most successful, communicate openly and succinctly to the right people - frequently. They have the confidence that information and updates will help their team achieve success. For them it's about success, not control.
Barry LaBov
LaBov and Beyond
www.labov.com
Thursday, September 24, 2009
Desperation and Motivation
Ever know someone who didn't do much in a particular job he or she had and then after being laid-off or let go, emerges at another company and is a ball of fire? I've seen it a few times.
Sometimes the person may have had a wake-up call, or maybe he or she had a healthier environment at the new company.
Sometimes it's desperation. The person is keenly aware that if things don'thappen immediately, he or she will not have their new job for very long. He or she is desperate, willing to push and push to get results. Willing to cheat, to break non-compete agreements, to stoop to almost anything.
In the short term, this may work. In the long run, though, it may not. The clients that are being pushed and prodded will sense the desperation and will turn away. Plus, if a company breeds that environment, the culture will eventually turn on itself.
If you need desperation to have motivation, the results, if any, will be short-lived.
Barry LaBov
LaBov & Beyond
www.labov.com
Sometimes the person may have had a wake-up call, or maybe he or she had a healthier environment at the new company.
Sometimes it's desperation. The person is keenly aware that if things don'thappen immediately, he or she will not have their new job for very long. He or she is desperate, willing to push and push to get results. Willing to cheat, to break non-compete agreements, to stoop to almost anything.
In the short term, this may work. In the long run, though, it may not. The clients that are being pushed and prodded will sense the desperation and will turn away. Plus, if a company breeds that environment, the culture will eventually turn on itself.
If you need desperation to have motivation, the results, if any, will be short-lived.
Barry LaBov
LaBov & Beyond
www.labov.com
Wednesday, September 23, 2009
Two Different Responses to Free Ideas
In our business of marketing, it's controversial to provide free ideas or spec work. One side of the argument says it's entrepreneurial to do that; the other side states that if you provide free ideas, you devalue your worth. I think both sides are right - depending on who is receiving those free ideas.
Here are two examples with two different outcomes:
For Company A, we conducted a mini-brand assessment as a way to get to know them and to prescribe what we thought they might need to grow.
We conducted a similar exercise for Company B that included creative concepts, with the intent that we would again, better understand them and show our value - all leading to paid opportunities.
Company A respected and valued our ideas and engaged us in working with them immediately.
Company B liked our ideas but immediately let us know that it would take time before we work with them and that if anything, they'll do a lot of the next steps internally.
Two different outcomes. Our team was excited to work with Company A and was deflated after the session with Company B.
The best conclusion I've come up with is that before considering free work, be completely convinced that the company you're doing it for is the right kind of future partner. If they're looking to take advantage of suppliers, it's best to leave the free work to someone else.
Barry LaBov
LaBov and Beyond
www.labov.com
Here are two examples with two different outcomes:
For Company A, we conducted a mini-brand assessment as a way to get to know them and to prescribe what we thought they might need to grow.
We conducted a similar exercise for Company B that included creative concepts, with the intent that we would again, better understand them and show our value - all leading to paid opportunities.
Company A respected and valued our ideas and engaged us in working with them immediately.
Company B liked our ideas but immediately let us know that it would take time before we work with them and that if anything, they'll do a lot of the next steps internally.
Two different outcomes. Our team was excited to work with Company A and was deflated after the session with Company B.
The best conclusion I've come up with is that before considering free work, be completely convinced that the company you're doing it for is the right kind of future partner. If they're looking to take advantage of suppliers, it's best to leave the free work to someone else.
Barry LaBov
LaBov and Beyond
www.labov.com
Tuesday, September 22, 2009
Generate vs. Wait
We read that there is low consumer confidence. That tells us most people have some money but they don't have confidence that they'll keep their job or that the stock market will rebound soon--they just aren't feeling good about the economy.
But the economy isn't 250 million people, it's 250 million economies of one person. Each of us has a different story: some have no job, some are holding on to every dollar, others are doing well.
The sales channel that is also trained on how to network, how to be entrepreneurial and how to create sales opportunities will do far better than a knowledgeable, but reactive or passive, channel.
Today it's not just about the product features and the sales price, it's about finding that consumer who has the resources to buy. They are out there, but you have to work to find them. The sales channel that focuses on this, will have an advantage throughout the recession.
Barry LaBov
LaBov & Beyond
www.labov.com
But the economy isn't 250 million people, it's 250 million economies of one person. Each of us has a different story: some have no job, some are holding on to every dollar, others are doing well.
If you're a corporation that sells through channels such as dealers, reps or distributors, you have to do more than supply a product at a good price. You have to educate your channel on generating sales, not just taking orders.
The sales channel that is also trained on how to network, how to be entrepreneurial and how to create sales opportunities will do far better than a knowledgeable, but reactive or passive, channel.
Today it's not just about the product features and the sales price, it's about finding that consumer who has the resources to buy. They are out there, but you have to work to find them. The sales channel that focuses on this, will have an advantage throughout the recession.
Barry LaBov
LaBov & Beyond
www.labov.com
Monday, September 21, 2009
The Burden of Success
Tony Mikes, of Second Wind, the world's largest advertising agency network, talked to me the other day about what he called the burden of success.
Today, with all that people have going on, it's all too common for us to look at opportunities as burdens - something that will get in the way of the other stuff we're doing.
The unique person that grabs the opportunity and runs with it can do wonders and may very well become a superstar. But while that sounds simple and easy, it's not.
In order for a large corporation or a small company to have people grabbing for those opportunities, three things have to take place:
1) The company must hire the right people in the first place
2) The company culture must support and promote that behavior
3) The company must reward that behavior
Do you have the kind of people that love challenges? Does your culture promote that behavior? And can a person do really well when they tackle that new project and make it a success?
Barry LaBov
LaBov and Beyond
www.labov.com
Today, with all that people have going on, it's all too common for us to look at opportunities as burdens - something that will get in the way of the other stuff we're doing.
The unique person that grabs the opportunity and runs with it can do wonders and may very well become a superstar. But while that sounds simple and easy, it's not.
In order for a large corporation or a small company to have people grabbing for those opportunities, three things have to take place:
1) The company must hire the right people in the first place
2) The company culture must support and promote that behavior
3) The company must reward that behavior
Do you have the kind of people that love challenges? Does your culture promote that behavior? And can a person do really well when they tackle that new project and make it a success?
Barry LaBov
LaBov and Beyond
www.labov.com
Friday, September 18, 2009
The Best Flogging
I have a buddy who works in a large corporation where it is difficult, to say the least, to be creative. The internal culture there is a bit stodgy and dark.
My buddy has the perfect attitude. He lets it all run down his back, almost to the point of denial. But he's smarter than that - he knows what he's doing.
He chooses to enjoy the contentious meetings, which is actually a brilliant move, because his response throws water on the fire of negativity there.
As he is "enjoying his floggings," he is also enjoying his job. Smart guy. Kudos to his company for hiring him, because he'll be able to positively alter their culture.
Each job has its challenges, and sometimes the best ones have the most.
Barry LaBov
LaBov and Beyond
www.labov.com
My buddy has the perfect attitude. He lets it all run down his back, almost to the point of denial. But he's smarter than that - he knows what he's doing.
He chooses to enjoy the contentious meetings, which is actually a brilliant move, because his response throws water on the fire of negativity there.
As he is "enjoying his floggings," he is also enjoying his job. Smart guy. Kudos to his company for hiring him, because he'll be able to positively alter their culture.
Each job has its challenges, and sometimes the best ones have the most.
Barry LaBov
LaBov and Beyond
www.labov.com
Wednesday, September 16, 2009
"Lifting" Ideas
Few things are more devastating than having someone take credit for your idea. Psychologists will tell you that. That's why at my company when a buddy of mine, Jim Buck, comes up with a great concept, I'll routinely say immediately, "Boy, am I glad I came up with that idea." To which Jim 's left eyebrow raises and we laugh.
But there's a more serious side to idea theft that happens in corporate America. It occurs daily in numerous scenarios. Sometimes there's a bid and one of the losing bidders has an idea "lifted" from their proposal and given to the winner. Sometimes, a supplier brings an idea to the customer, the customer takes it quietly or not-so-quietly and either does it in-house or gives it to a different supplier.
The point of this post is not to discuss ethics or bemoan situations like these. Rather, it is to offer one more reason why it's not the thing to do. That's because if you receive a great idea from someone and steal it, why would that someone ever bring another idea to you? If that idea is valuable, I think it's safe to assume that person is a source for more valuable ideas in the future.
The great songwriters, Lennon and McCartney, didn't write one good song, they wrote hundreds. The great authors, philosophers, and scientists were known for their great ideas--not that one thing they came up with.
When we hear or see a great idea, I think we need to realize that not only is that idea of value, but so is the source (the person, the company, etc.) from where it originated. The future ideas they have may be far more valuable than the one in front of you.
Barry LaBov
LaBov & Beyond Marketing Communications
www.labov.com
But there's a more serious side to idea theft that happens in corporate America. It occurs daily in numerous scenarios. Sometimes there's a bid and one of the losing bidders has an idea "lifted" from their proposal and given to the winner. Sometimes, a supplier brings an idea to the customer, the customer takes it quietly or not-so-quietly and either does it in-house or gives it to a different supplier.
The point of this post is not to discuss ethics or bemoan situations like these. Rather, it is to offer one more reason why it's not the thing to do. That's because if you receive a great idea from someone and steal it, why would that someone ever bring another idea to you? If that idea is valuable, I think it's safe to assume that person is a source for more valuable ideas in the future.
The great songwriters, Lennon and McCartney, didn't write one good song, they wrote hundreds. The great authors, philosophers, and scientists were known for their great ideas--not that one thing they came up with.
When we hear or see a great idea, I think we need to realize that not only is that idea of value, but so is the source (the person, the company, etc.) from where it originated. The future ideas they have may be far more valuable than the one in front of you.
Barry LaBov
LaBov & Beyond Marketing Communications
www.labov.com
Tuesday, September 15, 2009
Leadership is not waiting for support
Carol Ann is a friend of mine. She loves golf and had a dream. She wanted her golf club to host a national event. Sounds good, but it means a lot of work for a lot of people. It means taking a chance that the event doesn't turn out well.
Well, her dream was realized and the event was a huge success, thanks to her hard work and the hard work of hundreds of others.
She told me at the closing celebration how happy she was and that only months ago people were not believing in the dream, but as time went on and the event took shape, they started to support it more and more.
This is what all leaders face, whether at a non-profit event or in a multi-national corporation with 800 dealers worldwide.
The question to each of us is, are we willing to stick our necks on the block to make our vision happen?
Barry LaBov
LaBov and Beyond Marketing Communications
www.labov.com
Well, her dream was realized and the event was a huge success, thanks to her hard work and the hard work of hundreds of others.
She told me at the closing celebration how happy she was and that only months ago people were not believing in the dream, but as time went on and the event took shape, they started to support it more and more.
This is what all leaders face, whether at a non-profit event or in a multi-national corporation with 800 dealers worldwide.
If you wait for enough support that your task is easy, then you'll probably never get started. A true leader has the vision, the passion, and is willing to stick her (or his) neck on the block to make it reality. With that commitment, along will come the support of those who start to see and feel that vision, too.
The question to each of us is, are we willing to stick our necks on the block to make our vision happen?
Barry LaBov
LaBov and Beyond Marketing Communications
www.labov.com
Monday, September 14, 2009
FDR was right
I remember the famous line from President Franklin D. Roosevelt, "The only thing we have to fear is fear itself." I never really paid attention to its meaning; I just thought it was one of those catchy quotes that will live on forever.
Well, he was right. Fear is what we should fear. Fear of being open with a client or with an employee, fear of telling the truth, fear of being vulnerable, fear of charging what is fair.
When we're fearful, we send a clear message to others - whether they are clients or employees or friends - that we don't believe, that we don't have passion, etc.
We can't fool ourselves about fear - we can smell fear on others, and they can smell it on us.
For our companies to prosper and for each of us to lead fulfilling lives and careers, we have to fear only one thing - fear itself. We have to conquer it.
FDR was so right.
Barry LaBov
LaBov & Beyond
www.labov.com
Well, he was right. Fear is what we should fear. Fear of being open with a client or with an employee, fear of telling the truth, fear of being vulnerable, fear of charging what is fair.
When we're fearful, we send a clear message to others - whether they are clients or employees or friends - that we don't believe, that we don't have passion, etc.
We can't fool ourselves about fear - we can smell fear on others, and they can smell it on us.
For our companies to prosper and for each of us to lead fulfilling lives and careers, we have to fear only one thing - fear itself. We have to conquer it.
FDR was so right.
Barry LaBov
LaBov & Beyond
www.labov.com
Friday, September 11, 2009
Start from the Heart
The familiar mantra at corporations: advertising budgets are slashed, sales are down and there are more new cost-cutting and efficiency initiatives than you can keep track of. All this leads to confusion, low morale and poor results.
Our company, LaBov and Beyond Marketing Communications and Training, is working with a major corporation to help them motivate their brand teams and sales force on a new initiative that could dramatically impact sales and profit. The obstacles to success include reduced budgets, reduced client staff, and at least a dozen other internal programs going on concurrently (ranging from cost-cutting to re-orgs).
The only chance for success is to engage the employees first, well in advance of the customer base. If the employees see this initiative as something positive, something special and something that is separate from the other programs that are mentally draining them, then we have a chance to move a mountain.
Start from the heart. Look at your employees as your primary market. If they buy in and are energized, you have a chance for success. If you ignore them and focus on the external customer, think how limited your results are if your employees don't believe...
Barry LaBov
LaBov & Beyond Marketing Communications and Training
www.labov.com
There is an answer. Start from the heart--internally market and inspire your employees before you launch the next big product or before you begin your consumer re-branding campaign.
Our company, LaBov and Beyond Marketing Communications and Training, is working with a major corporation to help them motivate their brand teams and sales force on a new initiative that could dramatically impact sales and profit. The obstacles to success include reduced budgets, reduced client staff, and at least a dozen other internal programs going on concurrently (ranging from cost-cutting to re-orgs).
The only chance for success is to engage the employees first, well in advance of the customer base. If the employees see this initiative as something positive, something special and something that is separate from the other programs that are mentally draining them, then we have a chance to move a mountain.
Start from the heart. Look at your employees as your primary market. If they buy in and are energized, you have a chance for success. If you ignore them and focus on the external customer, think how limited your results are if your employees don't believe...
Barry LaBov
LaBov & Beyond Marketing Communications and Training
www.labov.com
Thursday, September 10, 2009
Double-edged Sword Economy
We are experiencing an extraordinarily interesting economy. Much less business is going on than a couple of years ago. Prices have fallen. Companies are teetering on collapse. The government is becoming a dominant force in the business sector, actually owning businesses and controlling them to an extent. The stock market is rising as it compares itself to six months ago, instead of two years ago.
We have millions unemployed and millions taking pay cuts to stay employed. Yet, there are opportunities.
Prices have fallen, making it more attractive than ever to buy product or even businesses. Cash is king, so if you have it, you're in the driver's seat.
But the thing is--and this is what is most amazing--many companies are not taking advantage of opportunities because of perception. They are not buying that business jet at a reduced cost because it will look bad to the shareholders. They are not buying that new building for their headquarters at 45% off because it will look wasteful. They are not investing in a tournament or a sponsorship because it's a bad message to employees and shareholders, yet it is at a bargain-basement price and it is believed that it would help grow the business. If they do own sponsorships, the corporations in some cases are taking their name off so that no one knows their involvement.
It's a double-edged sword economy. The corporations and individuals that will greatly benefit will have to face up to perception issues and weather that storm. Those that avoid the perception battle, will watch the opportunities slip away.
Barry LaBov
LaBov and Beyond
www.labov.com
We have millions unemployed and millions taking pay cuts to stay employed. Yet, there are opportunities.
Prices have fallen, making it more attractive than ever to buy product or even businesses. Cash is king, so if you have it, you're in the driver's seat.
But the thing is--and this is what is most amazing--many companies are not taking advantage of opportunities because of perception. They are not buying that business jet at a reduced cost because it will look bad to the shareholders. They are not buying that new building for their headquarters at 45% off because it will look wasteful. They are not investing in a tournament or a sponsorship because it's a bad message to employees and shareholders, yet it is at a bargain-basement price and it is believed that it would help grow the business. If they do own sponsorships, the corporations in some cases are taking their name off so that no one knows their involvement.
It's a double-edged sword economy. The corporations and individuals that will greatly benefit will have to face up to perception issues and weather that storm. Those that avoid the perception battle, will watch the opportunities slip away.
Barry LaBov
LaBov and Beyond
www.labov.com
Wednesday, September 9, 2009
Priorities vs. Options
In a previous post, we focused on the fact that non-priorities can be detrimental to progress. We have to clear them out of our minds and out of our way. That leaves us with priorities.
A common pitfall I see is confusing priorities with options. Just because you have a top priority, it doesn't mean your other priorities are now options--they may still be priorities and need to be tackled now.
If we can remove the non-priorities out of our way, that frees us up to focus on the critical issues, tasks and opportunities. That should clear our minds a little, and it ensures that we find some way to make sure every priority is handled successfully, not just the top one or two.
In a challenging economy we don't really have a choice as to which priorities to focus on.
Barry LaBov
LaBov & Beyond
http://www.labov.com/
A common pitfall I see is confusing priorities with options. Just because you have a top priority, it doesn't mean your other priorities are now options--they may still be priorities and need to be tackled now.
If we can remove the non-priorities out of our way, that frees us up to focus on the critical issues, tasks and opportunities. That should clear our minds a little, and it ensures that we find some way to make sure every priority is handled successfully, not just the top one or two.
In a challenging economy we don't really have a choice as to which priorities to focus on.
Barry LaBov
LaBov & Beyond
http://www.labov.com/
Tuesday, September 8, 2009
It's the non-priorities that you have to watch
At corporations, large and small, in general, there are less sales going on. So, we should be less busy, right? Wrong. It may be busier than ever.
Since there are less people at corporations, that means we are tackling more responsibilities, more territory and more responsibility. Plus, if we're focusing on attracting new business, we may be overwhelmed with prospects that require attention.
That's why we have to fully comprehend what our non-priorities are. We have plenty of priorities--those things that are vital to our business. But if we don't watch out, we'll spend our time on things that are urgent and of the moment, but are clearly not key to our success.
Imagine a corporation that sells over a billion dollars of product yearly. They have a great brand, excellent product and are strong potential for growth. But they are tempted to dilute that focus on pet projects that clearly don't have the magnitude of a number of other, less glamorous, issues that could be tackled. Yes, their people are busy, yes they have exciting things going on. But if they don't identify the non-priorities, they will be facing a disappointing year and plenty of lost opportunities.
It's not easy for all of us to do it, but with restricted resources and opportunities, the non-priorities have got to be identified and put on the shelf for someone else to tackle or for a different day (and economy).
Barry LaBov
LaBov and Beyond
http://www.labov.com/
Since there are less people at corporations, that means we are tackling more responsibilities, more territory and more responsibility. Plus, if we're focusing on attracting new business, we may be overwhelmed with prospects that require attention.
That's why we have to fully comprehend what our non-priorities are. We have plenty of priorities--those things that are vital to our business. But if we don't watch out, we'll spend our time on things that are urgent and of the moment, but are clearly not key to our success.
Imagine a corporation that sells over a billion dollars of product yearly. They have a great brand, excellent product and are strong potential for growth. But they are tempted to dilute that focus on pet projects that clearly don't have the magnitude of a number of other, less glamorous, issues that could be tackled. Yes, their people are busy, yes they have exciting things going on. But if they don't identify the non-priorities, they will be facing a disappointing year and plenty of lost opportunities.
It's not easy for all of us to do it, but with restricted resources and opportunities, the non-priorities have got to be identified and put on the shelf for someone else to tackle or for a different day (and economy).
Barry LaBov
LaBov and Beyond
http://www.labov.com/
Friday, September 4, 2009
Why it may be smarter than ever to do acquisitions
The sales cycle in our economy is extraordinarily slow today. It takes longer to make a sale, and when it finally happens, it may be for a reduced budget and it will probably move slower than imaginable. That means that new business development is more costly than in previous years.
It may be smart today to look at acquiring firms because they represent a faster alternative to grow business; and, since the economy is sluggish, those acquisitions should be more affordable than ever.
Of course, to do that, you need cash. Assuming you have cash, then every new business development plan must have acquisitions as a prime focus.
Barry LaBov
LaBov and Beyond
www.labov.com
It may be smart today to look at acquiring firms because they represent a faster alternative to grow business; and, since the economy is sluggish, those acquisitions should be more affordable than ever.
Of course, to do that, you need cash. Assuming you have cash, then every new business development plan must have acquisitions as a prime focus.
Barry LaBov
LaBov and Beyond
www.labov.com
Wednesday, September 2, 2009
No time to be cocky if you sell through the channel
In a previous recession, a former client, the president of a multinational company, had a business that was down 20 percent. He felt it was time to take his dealer network up a notch and demand more from the dealers. I didn't disagree with him that the dealers could do better.
He then said, "Since our business is down 20 percent, that means the dealers are down, too, which means I can play hardball with them. They need me more than ever."
That I disagreed with, but he didn't listen. He went ahead and crafted a new policy toward dealers that included reduced commissions and reduced territories. It went over very poorly and was a disaster. Why? Because he didn't understand the dealer mentality.
The average dealer is a small business person. He or she is important in the community and is not, generally, not in awe of a corporate exec. Many dealerships are family businesses, which means the current dealer principal is second- or third-generation, is used to living pretty well and is not interested in losing a hard-earned position in the community or at the country club or wherever. The focus is on protecting his or her wealth.
Upon hearing the threat from the president, several dealers quit and joined up with his competitors. The vast majority did not quit; they did something worse. They gave lip service to the president and then went about protecting themselves by dabbling in other small business ventures that would add a little money to their coffers. All that activity took the focus off my client's business and, in turn, he saw his sales and market share plummet further. His career with that company ended soon after that.
The corporation that sells through channels such as dealers or reps needs to make it as attractive as possible for the dealer (or rep) to focus all its energy on selling its products or services.
Just because sales are down doesn't mean the dealer is more focused on your product - in fact, it may mean the opposite.
Barry LaBov
LaBov and Beyond
www.labov.com
He then said, "Since our business is down 20 percent, that means the dealers are down, too, which means I can play hardball with them. They need me more than ever."
That I disagreed with, but he didn't listen. He went ahead and crafted a new policy toward dealers that included reduced commissions and reduced territories. It went over very poorly and was a disaster. Why? Because he didn't understand the dealer mentality.
The average dealer is a small business person. He or she is important in the community and is not, generally, not in awe of a corporate exec. Many dealerships are family businesses, which means the current dealer principal is second- or third-generation, is used to living pretty well and is not interested in losing a hard-earned position in the community or at the country club or wherever. The focus is on protecting his or her wealth.
Upon hearing the threat from the president, several dealers quit and joined up with his competitors. The vast majority did not quit; they did something worse. They gave lip service to the president and then went about protecting themselves by dabbling in other small business ventures that would add a little money to their coffers. All that activity took the focus off my client's business and, in turn, he saw his sales and market share plummet further. His career with that company ended soon after that.
The corporation that sells through channels such as dealers or reps needs to make it as attractive as possible for the dealer (or rep) to focus all its energy on selling its products or services.
Just because sales are down doesn't mean the dealer is more focused on your product - in fact, it may mean the opposite.
Barry LaBov
LaBov and Beyond
www.labov.com
Tuesday, September 1, 2009
Corporate and dealer relationships in a recession?
We all know there is a recession going on, but the aftermath of it will be felt in the relationships that dealers have with the manufacturers they represent.
Most manufacturers have reduced their sales force, which means that fewer of their people are spending less time developing relationships and business with the dealers. If the manufacturers don't overcome this, then dealers will look elsewhere to make money - they'll turn to the companies that spend time with them or the products that are easiest to sell.
The answer is to 1) increase the sales force (not likely); 2) focus on the top dealers and drop the rest; or, 3) develop alternative tools to engage the dealer such as online training or specialist programs designed to reward the dealer focusing only on your product and not the competition.
Once the economic recession starts to subside, there will be a relationship recession that will have to be overcome - unless you're one of the few that avoids it.
Barry LaBov
LaBov & Beyond
www.labov.com
Most manufacturers have reduced their sales force, which means that fewer of their people are spending less time developing relationships and business with the dealers. If the manufacturers don't overcome this, then dealers will look elsewhere to make money - they'll turn to the companies that spend time with them or the products that are easiest to sell.
The answer is to 1) increase the sales force (not likely); 2) focus on the top dealers and drop the rest; or, 3) develop alternative tools to engage the dealer such as online training or specialist programs designed to reward the dealer focusing only on your product and not the competition.
Once the economic recession starts to subside, there will be a relationship recession that will have to be overcome - unless you're one of the few that avoids it.
Barry LaBov
LaBov & Beyond
www.labov.com
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