fi pres 17_1_12 kmc

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Sales and Marketing

Understanding Customers to Create

and Sustain Your Business

Kris Childress

The Founder Institute

17 January 2012

8/3/2019 FI Pres 17_1_12 KMC


Mythbusting

Myth #1: Customer is always right

± Reality: customer is frequently wrong but he/she has the

money respect but dont fawn

Myth #2: Cheaper is always better

± Reality: cost and value always a complex interplay. Cost not

the only variable.

Myth #3: Customers are not always rational ± Reality: actually, this is true. Customers make decisions for

a host of irrational reasons that they then rationalize

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Reality

Nothing Lives In A Vacuum . . .

Especially Marketing

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The Greek word hamartia () or sin

means, literally, to miss the mark as in an archer

missing his target not hitting the bulls eye

Major sin in marketing = missing the mark by not

understanding customers needs and motivations

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CEM Corp: The Company

Current Model

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The CEM Corp. Challenge Pt 1

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The CEM Corp. Challenge Pt 2

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CEM - Digging for The Truth

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CEM Success Story 1

With CEM analyzers, a dairy processor could now

analyze incoming milk in minutes identify and direct

higher solids milk to valuable ice cream, etc. and sendlower solids milk to bottling. This reduced use of

expensive milk powder.

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CEM Success Story 2

Paper plant idling coating machines for any reason had

to do a 30 minute solids test on the liquid coatings

before restarts. Downtime was about $1,000 an hour.

CEM test = 2 minutes . . . paid for itself in a week. (The

plant later bought two more).

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CEM Sales Approach

OLD Faster analysis = greater

lab productivity/

efficiency/flexibility

W

ho? Lab manager/QC

NEW

Faster analysis = realtime information to takethe right action and saveor make more money bottom line value

Who?- Production Mgt

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Sample CEM Marketing Concept

Question: Whats the Difference Between these Two

Cheeses?

Answer: About $50,000 per year

A plant processing 500,000 lbs of cheese per week andraising the average moisture content by just 0.2% candrive over $50,000 to the bottom line. Its possible withCEMs amazing rapid moisture analyzer call us to findout how at XXX-XXX

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Company 2: Software Optimization

This US company sells optimization software thatoptimizes material blends

The software is most commonly used for processedmeats to achieve greater consistency and lowercosts (saving a penny or two per kg)

In 1992 Company produced the first software of thiskind in MicrosoftWindows

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Moving to New Markets I

Key market largeprocessed meat

plants in US wasrelatively small

By the late 1990sthe largest US

companies(Hormel, Armour

Swift-Eckrich, SaraLee, Johnsonville,

etc.) werecustomers

New marketswere needed

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Moving to New Markets II

Identified 3 common characteristics forprospective customers:

Raw materialsvary greatly in

quality fromlot to lot

Raw materialsrelativelyexpensive

Final productmust be

blended tospecifications

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Graphic: Reduce Your Biggest Cost!

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Taking Optimization

to New Vertical Markets

Other Possible

Markets Identified

Pet foods

No. Many entrenchedcompetitors from animalfeed markets, redocean

Citrus Juice:

No. Strong need butsome specs (such asacidity) are non-linearand not optimizeable

Processed Cheese

YES. Strong similarities tomeat processing

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Optimization Market #2: International

Meat identified a strong

international partner with

common marketing

interests (ProteinTechnologies now Solvay)

and worked co-operatively

in Spain, Argentina and

several other countries to

sell the software

Meat and processed cheese

identified knowledgeable

individuals with access to

other countries NewZealand, Canada and

Australia

Ultimately identified a

global partner selling

analytical equipment

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Final Example: Energy Consultant

Originally helped businesses in Chicago (IL, USA) area

to purchase lower cost power and gain-shared a

percentage of savings versus utility rate. In 2005 2 problems cropped up:

± Open market costs went ABOVE utility rates and

± Fixed utility rates were scheduled to phase out 1 January

2007

. . . Business model crashed.

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Restructuring Business Model

Company still provided value!

Customers more concerned about not losing than

saving!

Restructured biz model to protect against surges in

market prices. Company thrived.

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Moving Into Markets

Determine t he domain

knowledge needed. Forexample: economic

drivers, governmentregulations, industryecosystems, etc.

Find allies advisors, partners,

employees withsignificant domainknowledge

Find and connect

wit h centres of

influence analysts,writers, university

programs,associations, etc

Become involved

where informationis shared: blogs and

discussion sites,AND trade shows,conferences, etc.

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Some Take Aways

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Establishing Domain Expertise

Selling into most markets requires understanding the

customer needs and the rules of the game

±

I researched the industries we were selling to very closely actually became a speaker at university seminars on

applications of optimization technology

± I tried to partner with individuals and companies that had

domain expertise

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MBFPA

MBFPA: Marketing By Following People Around

(get close to your prospective customers)

Surveys and secondary sources are great, but . . .Spend time

with your customers and prospective customers (even if youare an internet company)

What do they do exactly?

What do they expect?What language do they use?

How do they/would they use your product exactly?

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How to Understand Customers

What do your customers want? Listen

What are their motivations? Ask Questions ANDOBSERVE (what keeps them awake?)

Do you have successes? UnderstandWhy

Do you have failures? UnderstandWhy

Where do your potential customers meet? Go there

What do your potential customers read? Read It

Who are your competitors? Study Them

Can You Become an Authority? Do It

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Bonus: Three Things to Do NOW!

1) Find and join all LinkedIn group(s) in your domain

(or create one)

2) Identify 3 trade groups in your domain3) Subscribe to (at least) three newsfeeds in your

domain (Google Alerts can be one.)

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Thank You(Dont Applaud Just

Throw (Paper) Money)

fi pres 17_1_12 kmc

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