(Abstract of Eric Gaynor Butterfield's presentation in “1 to 1 Marketing Days”, Buenos Aires, May 1999) - www.theodinstitute.org
Introduction and Main Orientation
In this section dedicated to "Business Intelligence", those particular aspects that have to do with "looking towards the Client" must be included.
Many people sometimes wonder "how is it possible that being such a person as he is - that many times he even had difficulty passing the simplest exams in high school - he has become a millionaire." The story is told of a group of high school graduates who met at an end-of-year dinner every year to celebrate their high school graduation, which had been in 1970. Year after year, from 1970 until In 2004, the graduating class of said high school met at a dinner where they remembered the good old days.
One of the graduates was George who had become a partner in a leading external audit firm; another was Bill who stood out as Professor at a prestigious University; Christian also participated, having had a successful career in a leading multinational company in mass products, reaching a regional presidency.
All of them had been very good students and had achieved great success in their different and respective careers, and they never forgot Larry who always struggled in high school to pass even subjects that were relatively easy. However Larry after a few years, and against all odds, he had become the richest man on the planet, beating even Larry Ellison and Bill Gates. On the other hand, things were not as promising as much for George (who had his career at the leading company in external audit services interrupted) as for Bill (who had not reached tenure and saw the need to look for other ways away from the University that were not so promising), and Christian (whose multinational company vanished when participating in a Mergers & Acquisitions process).
Things not being so good for George, Bill and Christian in recent times they always had the intention during the annual promotion party, to ask Larry "how he did to be such a rich man, the richest man on the planet". And this year - 2004 - they were determined not to miss this opportunity at the annual promotion party. So when almost everyone had already left the restaurant and there were few left, George, Bill and Christian were encouraged to approach Larry to ask him "what he had done to be so rich", saying that this was a great concern that they had. The three of them were afraid that Larry would give them the true answer and not end up lying to them, since within their being they considered that it was an important formula and that people usually do not share it.
However, against this question Larry said that he was delighted to be able to answer it and that he would have liked it to be done before since this concern dated from a certain time, but well, considering that the question was being asked now, he was delighted to answer it. at this very moment. And Larry's answer to his three friends is this:
"In all my businesses I always earn only three percent on what I sell." Bill, George and Christian felt a little mocked because being excellent professionals and experts in number management and everything quantitative related to finances, they knew that a 3% profit could not be enough even to stay and sustain themselves. the business as companies with higher rates had failed. One of them, George, who was rather angry because he felt somewhat mocked, rebuked Larry: "Look Larry, we are not doing very well lately as you know, we are not stupid since we have even helped pass many of your subjects in high school, and we don't want you to make fun of us by giving us this kind of answer. If you don't want to answer don't do it,but do not make fun of us because we are not doing very well at the moment despite our great successes in studies and in large companies ”.
To which Larry replied with all humility "that he was not making fun of them and that he was being totally sincere." Look, to see how sincere I am with you, who are my dear friends, I tell you again that I only earn 3% on what I sell and I am going to give you one more fact: “I really earn only 3%, my dear friends. … Since everything I buy from one I only sell to three ”.
What really goes through the head (metaphorically, since it is not the head but the mind) of some people to make them so commercially successful is something that in The Organization Development Institute International, Latin America we have been studying for a long time and not we have found a single explanation. However, there are some aspects that help us identify certain practices aimed at strengthening business intelligence.
Interestingly, most of the creations we live with daily are largely the result of “someone's” Business Intelligence who - paradoxically - is perhaps not the most creative. The Business Intelligence that is developed in this section is strongly related to methodologies, tools, techniques, mechanisms and also various everyday things with which we contact daily from the moment we get up and until we go to bed, but we know very little regarding how this important Intelligence is generated that is put at the service of the universal man.
In this section, the Business Intelligence is punctually focused, possibly man makes more use of, but knows less about it. And we all know people on the planet who stand out for their “business focus” but how these skills and abilities are developed is unknown. In reality, there is not a single University or Center for Higher Studies on the planet that is dedicated to developing Commercial Intelligence, as if they were assuming the fact that there must be some "other" that was commercial to solve "one's" questions.
Field and research work carried out by The Organization Development Institute International, Latin America has shown evidence regarding this particular type of intelligence that is especially present within the group of entrepreneurs and businessmen. These are distinguished by their transformational capacity with added value, which is one of the competencies found in the world of Business Intelligence.
Within this intelligence is a large number of innovators - who do not necessarily have to excel in creativity. Business intelligence is strongly linked to innovation. Notably, we have found evidence that certain cultures are much more pragmatic (the English) than others that can excel in conceptual frameworks (the French). For the former, who are absolutely pragmatic, everything is oriented towards some end or purpose and there is no point in "creating" something that cannot be translated into something concrete and practical. If anyone (other aircraft construction companies) was really interested in "delaying" the success of a project like the construction of the Concorde aircraft, nothing better than to form a coalition of "an Englishman with a Frenchman."
We can point out that in behavioral sciences we have not come to distinguish very clearly the characteristics linked to Business Intelligence of the different organizational participants with respect to those of entrepreneurs and businessmen. Within this last category - that of entrepreneurs - we have made a clear distinction between them in The Organization Development Institute International, Latin America by excluding those who have operated under the “cost + a plus” system, such as the group of state contractors since these do not imply the concept of "risk" that is inherent to the business aspect. Some tentative experiments are to be mentioned under this section.
Fortunately, the absence of a universal body of knowledge regarding the implications of Business Intelligence has been accompanied by many of our works for more than 30 years and supported by various conceptual frameworks and “best practices”. That is why at this time The Organization Development Institute International, Latin America is in a position to make available to the organizational / business world and to their respective practitioners and professional body, a comprehensive and comprehensive material related to those topics within the Business Intelligence that in greater influence on individual and organizational results, which we hope will be of significant help to consultants, academics, researchers, entrepreneurs, managers, executives and business professionals,assisting them in having a continuous, sustained and growing job existence.
Please note that in this Encyclopedia you have the first and only time to get acquainted with what happens to people in their interaction with "others", being these "other" organizations or companies. In reality, people who are outside the system - or leaving the system - are those who have not effectively managed this relationship, and therefore, after a stage of "isolation" and autism, they move towards a terminal relationship of non-interaction..
In order to facilitate the reading, understanding, understanding, recording and subsequent application of what is included in this Encyclopedia, we have divided the material into a first stage, into different sections. They are:
Sales Methodology: CRM as a path to personalized marketing
For many years, mass advertising seemed to be a simple solution to marketing and sales problems, since it was complemented by the fact that Customers bought from you. But the circumstances have changed and now there is a fierce battle for the market and also a great fight for the Client (one of our Clients, a leading beer company in the world, has called it a “tiger fight”). And one of the questions that we must now ask ourselves is the following: “Should we focus on our Clients from a new perspective? and the following: How and from what angle should we observe our containers? With novelty,diversity and transience we can NO longer move at the same pace as before and even less consider that "we have a Client Portfolio" (Many companies that request consulting services refer to us as "their Client portfolio." We have always felt uncomfortable - to say the least - with this type of listening, organizations do not have a “Client” portfolio and it is the first thing to work on if you want to improve things)
For many centuries the history of successful companies has been initially linked to the development of a product that was either new or had comparative advantages with other existing products. That is why the manufacturing and production department enjoyed special privileges and walked hand in hand with the owner or the General Manager of the company. The companies prioritized their interest in the "product" and in the activities of the Production department. The most important positions in companies, the “most populated” departments, the managers with bigger budgets and even the books on business administration dedicated more material and pages to this area more than to any other. Even the Universities included among the compulsory reading books those that were linked to the productive organization.
The importance of this area, and that of its organizational cousins, produced a multiplying effect that has gone beyond traditional disciplines and sciences as well as the areas of "Best Practices". Clinical psychologists began to be matched in number and importance to industrial psychologists who had large batteries of tests related to the skills, competencies, skills and knowledge of operators and workers.
Over time, with the improvements that accompanied citizens, with the orientation towards more participatory systems between individuals and the different organizational arrangements, added to the increasing knowledge about the behavioral sciences (Behavioral Sciences), began to privilege the importance of the "other" who, under the initial scheme of focus on production, was a rather passive participant who "had to have in mind what existed and was manufactured".
From that moment - for which there is no discovery or initiation date - the validity of a business function is generated that begins to take on more and more importance every day. “Hard” technology played a fundamental role since, above the soft communication sciences, some inventions and developments had a more than decisive influence. Take for example a particular product: the phone. The telephone (as a "hard" object that provides a "soft" service) has existence from the moment it is used to communicate with the "other" since it makes little sense to "call us to talk to ourselves". As Sara Pían pointed out: "… those… people who call themselves only find emptiness, monotonous, metallic, and inhuman busy tone."In fact, it is from this same metaphor that The OD Institute International, Latin America, begins to work with its Clients in developing a superior state based on privileging the interest of “others” (V. de S.: vocation of service).
In the organizational world we can say that this particular vision falls within the phenomenon that we call "mirror". As persons, employees of a company, suppliers or Clients, all of us “are” from the “other”, we exist and we are constituted from the “other”. Let us take as an example all the men who shave daily in the morning in front of a mirror: we are nothing other than the image that the same mirror transmits. We continue to shave - or stop shaving - based on what that mirror tells us: we are not clean shaved in the first case and in the second we are clean shaved. In conclusion, it is that "other" that appears in the mirror - and that paradoxically is our image - who tells us what we are and perhaps also how we are. That tremendous transformational power is what gives life to living beings,for all existing units of analysis: the individual, the groups, or the organizations.
From this perspective, marketing emerges, but like most inventions and developments, it does not follow from the previous stage. But that does take a very important step. With the irruption of marketing and its association with the “previous stage” where production is privileged as an initial and driving phase, it is about taking the target market as if it were a battle, hence the selection of the word warrior. And to take a market there is nothing better than taking as much of it as possible, regardless of its needs.
Most authors suggest the existence of 3 phases in the process of selection of a good by the buyer. It can be a need, a desire or an enjoyment, depending on whether it is the first, the second or the third phase. Our experiences (Eric Gaynor Butterfield, Michigan, 1975) suggest that we replace the third phase that most authors call "enjoyment or pleasure" with that of "high differentiation" that is present in all evolutionary social theory in humanity. And so it is that in this way we have somehow become pioneers since it was only in the year 90 that the word differentiation was introduced for the first time by those who are considered Marketing gurus (Don Peppers and Martha Rogers).
Alvin Toffler ("The shock of the future" - 1970; "The third wave" - 1975) suggests the presence in the last part of the last century of 3 factors that represent an explosive formula under the combination of: novelty, diversity and transience. And it is from there, to a large extent, that traditional and conventional organizations can NO longer respond to the demands of the context. Most of the companies had been established to sustain themselves over time with the development of very few products with a very long life span. So long was the life of these products (and after their services) that there were even "career development" plans for the staff of the organizations!Business leaders had not thought that in a short time they should go looking for "head hunters" as the most appropriate method of recruiting and selecting new personnel.
The competitive struggle was already underway and the multiplication of the consequences of these 3 factors, with the consequent reduction of human resources, made those “pioneering” organizations take care of obtaining a competitive advantage (Michael E. Porter: “Competitive Advantage”; CECSA - 1995). And competitiveness in practice has been implemented through greater implementation of automation processes and technologies, which, in turn, further reduced the number of personnel (it is known that one of the most important indicators of "effectiveness" that the subsidiaries of multinationals is the “head count” and its historical tendency to decrease). To this must be added the fact of the benefits of "economies of scale" which is manifested in the large number of Mergers &Acquisitions that reduce the need for human resources in "general service" areas. The vicious circle was underway and accelerated when (erroneously named) SMEs find it increasingly difficult to sustain themselves since the benefits of information and communication technology, as well as those related to the economy of scale, are not within reach. its scope.
Literature and works by practitioners aimed at describing what happens from what is known of the military and warrior world appear. Economists make their "contributions" both in this regard, by claiming that resources are limited, suggesting that then individuals, groups, and organizations must "compete for those limited resources" and, in order to be morally and ethically accepted, there is nothing better than to resort to the theory of Charles Darwin (“On the origin of species”; 1859) to whom the “formula” of the survival of the fittest is attributed, which is totally wrong since the theory of Darwin is an evolutionist. Rather, it was Herbert Spencer (“The development hypothesis”; 1852) who re-defined it as survival of the fittest).
In the face of competition for the same resources and the fact of precariousness in “transience”, everything seems to have a limited, short-term life, characteristic of all predatory activities. Many consultants in their professional services have used definitions regarding different “profiles” that “their Clients” could adopt, including: l. Leader; 2. Defiant; 3. Follower; 4. Boxed; 5. Guerrilla fighter. For example Alberto Wilensky ("Strategic Marketing" - 1997) defines different competitive structures based on "Theater of Operations" where the actors would take one of the four roles mentioned above. In turn, each of these profiles would assume different positions of "War". For the leader it would be defensive; for the defiant it would be offensive; for the follower it would be flanking; and for the boxer it would be guerrilla.In turn, each profile would make use of particular "maneuvers". Self-attack and blocking by the leader; direct attack and harassment by the defiant; surprise and constancy as well as attack from uncontested areas by the follower; and focused attack with a quick fold by the profile characterized as boxed.
The work and contributions of academics and researchers in the behavioral sciences began to be taken into account when both entrepreneurs and their advisers and consultants did not obtain any reasonable explanation for disparate results in the face of similar consequences, or similar results in the face of different stimuli, making use of of the military approach described in the previous paragraph.
This movement focused on the individual - and with what people have each of them in their head (the appropriate term is in their minds, but historically we have used the other phrase) - began to take into account more and more by business and organizational leaders. The problem was that - although one wanted to change towards this approach of prioritizing the individual, the Client - the conflict arose in the fact that there was not enough support both in the field of computer technology and in the field of communications. But man seems to get along very well with technological developments and during the end of the last century the solution in the field of communications and computer technology was available.
It was now possible to talk about the birth of one-to-one Marketing since a new and powerful technology and methodology was available to support business and organizational growth in a continuous and sustained way: CRM. This acronym corresponds to Customer Relationship Management and generally in the literature it has been translated as Managing Customer Relations.
What many people did not realize was that the result of the reduction of personnel in the largest corporations added to the reduction of SME companies, consequently reduced the "universe of buyers" and, especially, the universe of purchase. This in turn had a multiplier effect that has not finished decanting and we are currently in a universe of Clients and "Purchase" in decline. If the "cake" can no longer be enlarged (Arnold Tannenbaum: "Control in Organizations"; McGraw-Hill - 1968), it seems quite reasonable that what remains is to protect the portion that one has, and if that portion is "in reduction" We will have to put our focus - and our batteries - on the Clients of others, that is, our competitors.
And then the stage is set for Combat Marketing. We must learn about who are the leaders, the challengers, the followers, the boxers, those who operate in a niche and the guerrillas. The battle at the beginning centers between these last two categories since the other three categories (which represent only 6% of the universe of companies among them) have much more in common than things to compete (Charles Perrow: “Organizational analysis: a sociological view ”; Brooks / Cole - 1970).
However, every sowing is followed by the harvest, and those who sow winds reap storms. It seems that today Combat Marketing is in the intestines of all organizations and, unfortunately, also in that of its organizational participants and its Clients. Hewlett-Packard may "transfer" his business to Compaq in some country hoping for reciprocity from the second, but when the time comes the company that is "alive" must pay its bills.
And the fight and battle for the Client, to serve him better, to serve him beyond what the product means does not seem to be enough. Mass Marketing is at the point of diminishing returns. Database marketing seems insufficient and even negative for its "intrusion" into the lives of troubled Clients. And niche marketing is too "small" for "large" organizations (in size) that have difficulty mimicking, adapting, and reconditioning.
Interest in the Client is not bad; obviously it is a necessary condition. But it does not become a sufficient condition. The sufficient condition lies in directing the artillery towards the "piece of the cake" of our competitors and obtaining an important part of it. Consultants, practitioners, and trainers deploy all kinds of material "talking" about Combat Marketing where "observation in the other" is privileged. What a discovery! At The Organization Development Institute, Latin America we have known for more than 40 years and more than 30 years we have found ways to operationalize this concept to effectively put it into practice in the business world. The "Johari window" and "Er-odi window" are tools that have been in use for many years,had they been implemented while respecting organizational values, their organizational participants and their Clients, they could have dampened - to say the least - today's battles in companies to “take a portion of the other”. But for this it would have been necessary to start from a position exactly opposite to that of economists and political science experts: it has been shown that resources are NOT limited and consequently, since they are not scarce, no predation is necessary. The parable of Jesus Christ on the multiplication of fish and loaves is an excellent testimony that, unfortunately, has been ignored.But for this it would have been necessary to start from a position exactly opposite to that of economists and political science experts: it has been shown that resources are NOT limited and consequently, since they are not scarce, no predation is necessary. The parable of Jesus Christ on the multiplication of fish and loaves is an excellent testimony that, unfortunately, has been ignored.But for this it would have been necessary to start from a position exactly opposite to that of economists and political science experts: it has been shown that resources are NOT limited and consequently, since they are not scarce, no predation is necessary. The parable of Jesus Christ on the multiplication of fish and loaves is an excellent testimony that, unfortunately, has been ignored.
Combat Marketing NOW tells us that what really matters is knowing the container. To our container. It suggests that the shortest distance to reach the Client is not the straight line to the Client. In the end, if it is our competitor who has the Clients, then it makes sense to direct our arsenal towards him. It is striking that what the OD Institute knew long ago was not taken into account; It is even “public” knowledge since this practice was exercised to some extent by laboratories. Indeed, this important industrial sector instead of directing a large part of its energies towards the final Client does so towards the Doctors.Much has been learned as a result of what happens in the marketing and sales process in the laboratory sector (especially related to a “portfolio of Clients segmented / grouped by“ clubs ”), although little of it has been put into practice in other industrial sectors.
The difference in approach
In relation to the subject at hand - Combat Marketing - at The Organization Development Institute International we suggest paying attention to some aspects that we have not seen pointed out or applied in their correct dimension.
Findings in various field work and consulting interventions related to the Change towards organizational efficiency and effectiveness show the importance of taking into account the two-dimensional concept and practice over the one-dimensional one. From this new perspective, one can manage “correctly” in each of the two dimensions instead of viewing them as opposite poles of one dimension.
When adding the concept of globalization to these two dimensions, it is also important to bear in mind that in the early 90s of the last century many of the Latin American countries were dazzled by the phenomenon called (wrongly) globalization. Already entered the first years of this new century and millennium, and looking at this phenomenon in retrospect, many consequences are manifest that have been dysfunctional, to say the least. And some corrective steps are currently being taken.
Something similar happened about 2000 years ago when the emperor of Rome - Augustus - considered his intention to capture other markets "outside its borders" as opposed to the policy of another Roman emperor, in this case Adriano, who preferred to close the borders of Rome. These two different orientations show similarities in terms of the results achieved and their consequences, despite the fact that the second of them was not mainly oriented towards the power, control and capture of "the market" but rather towards the capture of "Sabine" women..
Organizations until the end of the 80's of the last century grew “naturally” as a consequence of the natural demographic growth, the higher productivity derived from the advances in technology and communications, the principle of economy of scale and the partial transfer of these benefits. to the clients. The most developed economies in the world privileged the exploitation of "new" sectors over the traditional ones, and thus they differ from the least developed ones by appropriating control of the tertiary sector, including trade, finance and services in general. Automation - as an invisible invention - and its direct implications on the productive forces, generates a job availability that runs parallel to the phenomenon of "Client reduction".The virtuous circle to which we were accustomed begins to be extinguished and to be replaced by a vicious circle where the reduction of Clients “seems” to be compensated by lower operating costs through the implementation of new technologies.
The lives of business leaders are no longer the same. In the first years of “globalization”, the national businessmen of these Latin American economies begin to feel pressured by a phenomenon to which they were not accustomed since - until then - protection mechanisms existed for their local companies. The “mergers & acquisitions” represented a Damocles sword hanging over their heads, and at that time business decisions never again resembled the decision-making they were used to.
Until then, business strategy and tactics went quite hand in hand and could function under the organizational scheme called hierarchical-pyramidal. But, from then on, that organizational arrangement with which he had lived and succeeded for so many years, was no longer enough just to grow, but not even to stay alive. In the NEW organizational world we find the famous phrase that is shared by the gurus in their speeches and talks addressed to businessmen, executives and business managers: "You think globally and you act locally". That it bears a lot of similarity with the fact that the strategy is thought globally and therefore the local unit has to concentrate on acting. (sic).
And this is one of the new and maximum dilemmas of organizations in this millennium that is just beginning, since organizations cannot continue taking the traditional pyramid shape, and it is possibly useless to incorporate what they have learned in matrix organization. Organizations have a need to take a new shape. And that shape may have more to do with an hourglass at times. Here it is suggested to keep in mind that the requirements of the Clients are the ones that will largely predetermine the organizational type that we will have to develop, which is totally opposed to traditional practice and that is in force in almost all markets.
Some think that this dilemma has to do with what a great Chinese strategist (Sun Tzu) pointed out about 500 years before Christ and that was reflected in the book "The Art of War". Conceptually Sun Tzu privileges strategy and the importance of careful planning, suggesting that you can even submit to the contest without even fighting (lobbies for non-competitive vs. clubs for the really competitive). On the other hand, and to attack the same problem, other war marketing experts such as Al Ries and Jack Trout ("War Marketing"; McGraw Hill - 1986) mount on the experiences, experiences and suggestions of a German general, Carl von Clausewitz. Carl wrote On War in the 18th century,suggesting the importance of the tactical aspect and the need to define the lawsuit fighting the most important battle.
Much is said about strategy and tactics, but little is what we know about how to effectively unite them to improve organizations. In various field and research work, as well as in multiple implementations of change in companies, we have found evidence showing a type of organizational arrangement that we have called “hourglass”. As we all know the hourglass has a key point, the one where a bottleneck forms and where only very few grains of sand can fall in the "bottom half".
What these people in this hourglass “bottleneck” DO (and also do NOT DO) largely determine organizational and business success. To put it in other words, and to respond to so many consultants and trainers, we suggest to people interested in solving this dilemma that “Napoleon did not win his battles simply because he was an extraordinary strategist. Each of the men that made up his army were true gladiators. ”
This means that what is at the top of the pyramid must be brought to ACTION by people who are NOT. We have a multiple organization chart that we have developed since it has been the prevailing one that we have found in more than 217 organizational improvement interventions, and we call it multiple since it reflects a similar mechanism independent of the business sector or company size in question. In this “multiple” organization chart we have found “that managers, bosses and supervisors generally“ look upwards ”expecting orders and instructions that many times never arrive and that must be transmitted to their subordinates… who have little interest in complying with them.."Our job now is that we DO NOT point our fingers" blame it at the other "but turn it around and see what each of us is NOT doing. When the students pass an exam, they say to their friends: "I passed"… but when they do not pass the exam, they do not say "I did not pass"… they say "They knocked me out."
We attack this phenomenon based on the development of competences where the human being is not seen simply as a complex man, we go a little further. Evidence has shown us that organizational efficiency has to do with the development of people who can operate beyond the traditional one-dimensional scheme, where the action is carried out based on a position chosen "within the same and unique dimension". The development of competencies and skills and knowledge that help to operate two-dimensionally to these people must be the main responsibility of the Company's Management, since these people who are in the bottleneck require them if the organization is to survive and grow over time.
When resources are scarce, objectives are increasingly demanding, the market shrinks, and times are shorter, one-dimensional man is in serious trouble. Both Sun Tzu and Al Ries and Jack Trout in their excellent works mention two relevant variables: us and the container. It is possible that those who want to effectively implement Combat Marketing must also incorporate a third component, our own organizational arrangement where the tactic reconciles with the strategy, thanks to the development of people who must necessarily think and act bi-dimensionally.
Thinking and developing a great strategy is not half the work right now, nor can tactics be credited with 50% of success. For efficient companies, it must be indispensable to have in the bottleneck ONLY those who are in a position to autonomously resolve new situations that they have to confront with Clients. It is not fair - or even moral - to send unskilled soldiers to war who also have no cause to fight for.
The planning of how the company will relate to the Customer can be done through a methodology, such as CRM. But we know very well that only with the Client's feedback, with what the Client “sees in us (Johari window) and through these key people positioned in the bottleneck of the hourglass, who have bi and multidimensional competencies, can fight effectively and efficiently. This should be the “to be done” task in which the owner, entrepreneur or senior management of the company must be involved. And this implies, among others, working on the three fronts:
- The Client Containing our organizational arrangement
Each of these fronts in turn requires a particular orientation:
- the Client (cooperative approach; giving and serving) the Container (competitive approach) our own organizational arrangement (combining the cooperative approach with the competitive one)
What new “type of person” do we need as an organizational participant, to what stimuli does he respond, what new needs does he generate over time, and what vocation of service is this new dimensional man destined to provide, must be exclusive factors that can no longer be more ignored by the top management of corporations or by business owners. We know that the need to be autonomous is one of the requirements, but we must go even further.
The competitive advantage of the Latin American company. What does it consist of.
We will write this chapter with you. Well it deserves to be done. Thank you, thank you very much for sharing!
Tess and CRM Dynamics - Marketing one to one
SELF-APPRECIATION - CRM
In my opinion Customer Relationship Management (CRM) is
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In my opinion Marketing 1 to 1 is
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I believe that the companies that implement CRM will have the following three advantages: …………………………………………………………………………………………..
Companies that implement CRM will have the following three disadvantages: ………………………………………………………………………………………………… …………
Implementing CRM in a company implies considering the factors of Resistance to Change, some of the main ones being:
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The main opponents (roles) within a company to implement CRM are
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I can define the company where I work as
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Dinamica CRM (PROMAS SA)
You are Carlos Loprete and you are the Commercial Manager of an important national company, leader in its economic sector, created at the end of the Second World War of the last century. It has always been dedicated to the manufacture of massive products for the last 50 years of life.
The President and founding partner of the company (PROMAS SA) - Gregorio Lombardi - is 72 years old and has survived all kinds of ups and downs. There were times of inflation, some declines and others "galloping", times when new containers appeared, and also times where state contractors took a significant portion of PROMAS SA's market share. There were times when the difficult situation of the company made it necessary to export Some products and at other times, the company also survived the ups and downs of the financial market.
About 7 years ago Gregorio Lombardi did a re-engineering in PROMAS SA and you (son-in-law of Gregorio Lombardi for being married to his daughter Martha) were promoted to the Commercial Management of the company. Until then Gregorio had been very careful and had always managed both the commercial and financial areas directly with the minimum of delegation. In this re-engineering Gregorio made it very clear that he had "met his quota" and that the company should be run by different family members and some of his youth friends, with whom he had started the company. In his own words, "I have already sown enough, this is the time for me to harvest."
Gregorio Lombardi in his capacity as President and You (Carlos Loprete) in his capacity as Commercial Manager along with 5 other people (see Annex I) make up the Executive Committee of the company PROMAS SA At Board meetings, which are held only 4 times a year later, Héctor Lombardi (Gregorio's second son) also attends. He currently holds the position of CEO of a leading multinational company in the automotive sector; and extra-officially he operates as his father's advisor in PROMAS SA Gregorio Lombardi has 94% of the company's shares. The remaining 6% is divided equally between: Ignacio Lombardi, "Pepe" and Raúl Vivas (See Annex I).
Until about 10 years ago, they enjoyed a quite comfortable situation since they concentrated around 50% of the market share. In the last 5 years - and as a result of globalization - some smaller local companies (which in total had no more than 20% of the market) were acquired by a multinational company. This multinational company (UNIPRODUCTS Inc.) ranks third in the world.
At this time PROMAS SA has lost its original privileged position in Ecuador as its market share has decreased to just under 40% while UNIPRODUCTS Inc. has increased its share to just over 30%. What is extremely serious for PROMAS SA since the total universe of "sales" has also been reduced.
The President and Founder of PROMAS SA is now in a dilemma. He has recently turned 72 years old, he has maintained leadership based on his strong innovative capacity as an entrepreneur in all kinds of situations and his orientation for organizational arrangement has been strongly familiar and "friendly", placing him in the highest positions in the company to people of his direct family and / or friendship, and, in recent years, also to members of the in-laws. Initially, many of his collaborators were also his colleagues and friends, of whom there are very few.
Gregorio Lomardi has called two consulting companies (one of them a “Big Five” and the other specialized in Marketing and Sales) for the next Board meeting to be held within a week. All the people who make up the Executive Committee plus Gregorio's “adviser” son, Héctor Lombardi, will attend there. The task that Gregorio has requested from each of the members is to present a situation report on "what should be done immediately", mentioning the intentions of each one regarding staying or leaving PROMAS SA with concrete proposals of real impact. economic for both the company and each one of them. The consulting companies in this first meeting would work as facilitators of the meeting.
Gregorio has prepared a report that has been carried out and updated by a group of fairly young people from the company with university studies, almost all of them, and some of them with several years of graduation, who report to the different members of the Executive Committee. According to these people / professionals - and this is stated in the report - the company “has not been renewed” and the most capable of these people / professionals say they are not willing to continue working for what they call “a family and group of friends. inefficient ”.
Gregorio Lombardi does not rule out the idea of selling the company. However, one of the reasons why he refuses to do so is because "inside his head" he has filed a decision that he considers to have been possibly unsuitable, rejecting a proposal that the company UNIPRODUCTS Inc. made some time ago. 5 years. Today, UNIPRODUCTS Inc. offers only a third of what it had offered at that time to buy PROMAS SA
Annex I
President and Founder: Gregorio Lombardi
Commercial Management: It is in charge of Carlos Loprete. Carlos is the son-in-law of Gregorio Lombardi since he is married to one of his daughters (Martha Lombardi). During his first years in the firm he was an excellent collaborator and enjoyed full confidence in the eyes of the President and father-in-law. During the last two years Gregorio Lombardi does not think the same today, although he does not know for sure the rationale for this change. The President is aware of some marital problems between Carlos Loprete and his daughter Martha. According to some rumors, Carlos Loprete has become a bit "in love" in recent years. Carlos and Martha have 3 children: 6, 4 and 2 years old. At this time Gregorio regrets in part having "handed over" the Commercial Management to his son-in-law, thinking that it makes him a little vulnerable.Some friends say that over the years Gregorio has become more and more suspicious.
Administrative - Accounting Management: It is in charge of Ignacio Lombardi. Ignacio is the oldest son of Gregorio Lombardi, and he is a CPN. According to his father, Ignacio is the one who watches his back as an "auditor" of the company and trusts him fully. Ignacio twice found small petty cash failures in the Production Management under “Pepe”, which was immediately reported to Gregorio. Many disputes between Ignacio and "Pepe" are due to this incident.
Production Manager: He is in charge of a childhood friend of Gregorio Lombardi., Known by his nickname "Pepe". He is about 65 years old and, according to many, continues to work at the company because of his friendship with the President and also "because if he retired, the money would not be enough to live on."
HR Management: He is in charge of the son of a great childhood friend of Gregorio Lombardi. His name is Luis Benítez and he has received from a lawyer. A while ago this same Management was directed by a person who had worked with Gregorio Lombardi since its inception, who retired a few years ago. It is there where it was preferred to change the profile of the company for this Management and hire someone "who does not know as much about the Company", but can be useful in all labor lawsuits and disputes with the Union and staff.
Head of Systems: He is a nephew of Gregorio Lombardi (son of his sister Ana María), named Andrés Cepeda. Andrés has a Bachelor of Systems from a recognized National University. He has been working for the company for about 4 years trying to provide it with better IT
Logistics Manager: It is in charge of Raúl Vivas who worked for about 20 years in Production Management. He is a lifelong friend of Gregorio Lombardi and collaborated very closely with Gregorio during the early years of the company, which were really tough. According to Gregorio Lombardi, and despite the friendship that both have in a personal capacity, for him Raúl Vivas is not fully prepared to work in the company at the level of competitiveness that it requires. Ignacio conducts periodic audits in different sectors and suspects that Raúl and Pepe together carry out some "small" businesses to the detriment of the company. Ignacio has asked his brother Héctor Lombardi who acts as an adviser to give him a hand to (what he calls) unmasking this process;The latter has told him that he is too busy with his own work at the multinational.
Gregorio Lombardi's advisor: Héctor Lombardi (second son of Gregorio Lombardi). He usually attends Board meetings, which are held only 4 times a year. Héctor currently holds the position of CEO of a leading multinational company in the automotive sector. Héctor has a Master in Business Administration from a prestigious university in the United States and is convinced that PROMAS SA is not well managed, to say the least.
Sequence of Work to be carried out:
Four groups are assigned each one made up of each of the members of the PROMAS SA Board of Directors (with the exception of Gregorio).
Two more groups are assigned. One of them is a consultant that responds to a “Big five” (Price & Value) and the other is an expert consultant in Marketing and Sales (Mktg.Experts).
The work to be done by each of the four groups is as follows. Each of the members of the Board of Directors (with the sole exception of the President, that is, Gregorio Lombardi), working individually, must develop a final report with “their position” defining:
if you are interested in staying or leaving the company and under what conditions;
in the case of choosing to stay at PROMAS SA, each one must divide their report into the following sections: - diagnosis; - CHANGE suggestions and recommendations; - resistance factors to consider; and maximum time of the Exchange program.
The work to be done by each of the two groups of Consultants is to present: 1. their own conclusions; 2. a Change Program for the Commercial and Sales area; 3. Fees for professional services.
The work to be done by Gregorio Lombardi (President) is - after listening to each of the members of the Board and each of the two teams of consultants - give feedback to:
all the other members of the Board of Directors,
the two Consulting companies and also CHOOSE a method to Change and Improve the current situation (it can be with one of the two consultants or without them).
DINAMICA CRM (Promas SA) - continued
30 days have passed since the Board of Directors meeting was held where Gregorio Lombardi received a report from each of the members of the Board of Directors responding to his “personal position” defining:
if you were interested in staying or leaving the company and under what conditions;
in the case of choosing to stay within PROMAS SA, the report should have been divided into the following sections: - diagnosis; - CHANGE suggestions and recommendations; - resistance factors to consider; and maximum time of the Exchange program.
The two consulting firms must NOW submit a Proposal for professional services that includes:
diagnosis of the situation;
implementation of an Improvement and Change Program;
resistance and obstacles to arise;
amount of fees and method of payment.
Sequence of Work to be carried out:
- Two groups are formed, each representing one of the two consulting firms; each of the consulting companies must present a report that includes, as a minimum:
Diagnosis;
Program of Recommendations and Suggestions for Change and Improvement;
Change and Improvement Implementation Plan and Program;
Obstacles to overcome and factors of Resistance to Change;
Adjustments and Contingencies;
Termination of services;
Amount of fees and method of payment.
- Each of the consulting companies must present their Proposal to the Board of Directors. Gregorio has decided to include three young people / professionals in the Directory as a way to add “new ideas”. These three people are the ones who sent him to Gregorio Lombardi before the first Board meeting where the consultants acted as facilitators, a report stating that the company "has not been renewed." In addition, these three people mentioned the fact that they were not willing to continue working for what they call “an inefficient family and group of friends.” Once the report was presented by the two consultants, each of the members of the Board would give their feedback. to the President at that same meeting. For the three young professionals, only one of them would represent the rest.
Feedback should then be given by:
Commercial Management (Carlos Loprete)
Administrative Management - Accounting (Ignacio Lombardi)
Production Management ("Pepe")
HR Management (Luis Benítez)
Head of Systems (Andrés Cepeda)
Logistics Manager (Raúl Vivas)
Advisor to Gregorio Lombardi (Héctor Lombardi)
Moving forward with the exercise and after the second part of the exercise where feedback from all the Board members is heard, Gregorio Lombardi decides WHAT TO DO, WHO to stay with, and HOW TO DO IT. (A group of 3 people answers for Gregorio Lombardi).
Finally, about 3 participants are left as observers of everything that happened until then. These three participants should mention what was given particular emphasis and to what extent some concepts shared during the Seminar / Workshop have been overlooked.
What are the main advantages of CRM over traditional marketing
- Allows to pay attention to individual needs It is a business strategy Allows to lower advertising costs Allows to group Clients (segmentation) Allows to direct the resources and energies of the organization towards Clients that add more margin Allows to focus on specific campaigns Allows to control and monitor sales Allows to measure the results of different profit centers It allows to differentiate itself from the competitors It allows to identify and know the rhythm of new and possible Customer needs It therefore allows to satisfy new needs transforming them into desires It allows to increase Customer retention and attract new customers Reduce the cost of channels, which is 20 to 40% of the total cost It allows prioritizing the differentiation by service,above the price Allows to have the Pareto scale and monitor its operation Allows to enter and exit a product or service quickly Allows to focus attention on different channels based on the preferences of the Clients Allows to reward the personnel based on their contributions to the company
Major conflicts within CRM related organizations
- The manufacturer must do:
Large investments in fixed assets
Investments in fixed assets are difficult to transform into liquidity
Investments in the product and in updating it
It must fight against competition and also obsolescence
It must focus on WHAT is the product
It focuses on the technical attributes of the product
- The manufacturer wants:
% Of the market for the product
Warranty support
Orders of many units for few products
Open purchase orders - purchase commitments
Loyalty and loyalty to the product
- The wholesaler must do:
Large investments in working capital
Invest in high variable costs
Focuses on the post sale
The Client should work for him, via references show room
- The wholesaler wants:
A% of the market per account / Client
Guarantee policy where the promised is faithfully fulfilled without problems or setbacks
Orders of units with high margins
Flexibility in the orders and that the client enlarges
Availability of many products
Anecdotes
- The boy who comes in to ask if the lady wants me to cut the grass Midwest supermarket where the owner pays a Client for something the Client did not buy The case of the IBM supplier company that sends him a letter (after IBM He tells them that they are very strict in quality control, saying that they do not admit more than 3 per 10,000 in defects) where he tells them that they are sending the defects separately and that they apologize because they do not understand well how IBM does business
CRM - Cases
1. In a cell phone company
2. In a ship supply services company (mainly fishing).
3. In a Training and Consulting Company.
4. In national medium-sized companies with the Owners - Founders experts in “the product”
5. At a market-leading financial institution that also operated a credit card.
1. In a cell phone company
It is a company that provides the service of selling and renting cell phones (TELCEL SA) that has been receiving complaints from many of its new users and also defections from them.
This company has been quite effective in carrying out promotional campaigns both in relation to the promotion itself and the recruitment of new personnel as part of the sales force.
We have been consulted by the CEO of TELCEL SA who was concerned about the unusual number of complaints as well as the number of Clients who have decided to cancel the services of TELCEL SA; some of them have even sent document letters to the CEO asking for compensation for non-compliance and poor service.
The sales force's offer included a rental service for 4 cell phones - corporate system - where they had around 1,200 free minutes during the first three months, along with special discounts with long-distance calls outside the country's capital city.
The promotion carried out through the sales force consisted in pointing out that the total cost of the service for these new Clients would be of the order of 33% less than that of the three main competitors.
The complaints included the collection of administrative expenses, expenses for "insurance" of the equipment for rent, which added to the fact that the 1,200 free minutes could be applied only to the "mother" cell phone, resulted in "final" rates for users practically same amount as they had to date with the other cell phone firms. As also the change of service provider for new Clients involved a small additional cost, Clients argued that the final numbers showed in some cases, even higher costs than they were used to.
Needless to say, during the entire defection process, new Clients were subject to game rules that were not foreseen in the accession contract. The Collections department invoiced with interest and late fees, and in many cases the complaints of new Clients to the Customer Service department did not receive any firm response from the company, when on several occasions they have been "cut" the service for collections and unexpected charges. And the Sales department was also conspicuous by its absence.
One of the main complaints from the Clients was that “TELCEL SA” was efficient only to get new Clients but “… they did not exist to respond to their specific needs. They only serve so that one speaks with an answering machine, and so that when communicating with someone, it does not give any solution. TELCEL SA has expert referrals ”, as stated by a Commercial Manager of a leading service company in computer technology.
This is a typical case of inconsistency between what the company has in its head with respect to what the Clients need (and in turn they also have in their head). Among other things.
2. In a ship supply services company (mainly fishing).
The President and main shareholder of a ship supply company (Servicios Portuarios SRL.) Specializing in fishing vessels - “factory ships” - required our services several years ago when he saw that his profits were thinning and they were beginning to shed losses.
They had tried to lower profit margins and two consulting firms had assisted them in finding a solution to the economic situation they were facing. More than 70% of its capital was immobilized as a result of the storage warehouses and all the required supply equipment that was linked to them (transport fleet and personnel, among others). They had significant amounts “receivable”, paid high financial costs for the provisions to be paid (to wholesalers) and the Banks had already stopped lending them additional funds. For the overdrawn amounts up to the time of the cut, the Banks had a financial cost towards Servicios Portuarios SRL. On the order of 5.2% per month, when there was a 1 to 1 parity between the local currency and the dollar.
The factory ships entered different ports where the naval supplier had their respective warehouses of provisions, both perishable and non-perishable, which included food products such as health and hygiene. The usual supply procedure consisted of factory vessels making their requests to the central office of the fishing company and from there forwarding it to each of the port branches of Servicios Portuarios SRL. Who should have in their warehouses all the provisions required to supply the crew of fishing vessels.
It was decided to replace the system of "fixed base supply services" with a mobile supply service, based on the specific needs of each of the ships at the time of entering the port. For this, Servicios Portuarios SRL. She transformed all fixed assets into liquid assets, which in addition to gaining liquidity, she was able to cancel all her late payments, which in turn represented a significant financial burden.
The service began to be provided through refrigerated trucks that in ONE SINGLE DAY, had to be supplied with: dairy products, beverages, white and red meats, non-perishable and canned products, cold cuts, fresh vegetables and fruits, eggs, utensils bazaar, as well as clothing, white goods, medicines and other hygiene and health elements for each of the 25 average crew members that made up each crew of the fishing boat, which would be on the high seas without returning to port again about 25 to 35 days.
This logistics integrated in a mobile way in the company Servicios Portuarios SRL. It allowed it to reduce the cost of its services in the order of 35%, which represented an important economic advantage for the owner of the fishing vessels. In turn, in less than 90 days, he had total liquidity when disposing of fixed assets and found profit margins that were higher even than those of "his best time". Its contribution margin was in the order of 32%, but the most important thing was its reduction in general costs in the order of 45%, which added to the elimination of the financial cost under the previous operation of "port services on a fixed basis", began to make withdrawals available to shareholders with returns greater than 37% of net equity.
After many years after carrying out this consulting work, we have learned that at Harvard and other Centers of Higher Studies, it was "taught" as a worldwide LEADING firm, manufacturer and direct marketer of computer systems, had done something similar… many years after what we did. Their case is a famous Case, and is related to the direct link between the Client and the server where the logistics, front office, customer service, assembly and part integration functions are integrated. This world's leading firm is Dell Computer.
3. In a Training and Consulting Company.
A few years ago, and in my capacity as President of The Organization Development Institute - Latin America, we anticipated our Clients who had to train in Organizational Development and CRM-One-to-One Marketing practices, which among other things implies:
- Organize by processes instead of niches; Open new business units in order to reduce the general costs of existing units at the moment; Train and train staff to work as a team; Train Leaders to be Leaders with a Service Vocation; Train Managers to be Leaders; Train Professionals, executives, managers and executives to GIVE before receiving. Train to "do things Today in a better way than we did yesterday" and "do them tomorrow in a better way that we do today. ”Treat everything we have filed unequivocally as a mistake.
Our income came from 40% for software creation and development; 40% for consulting and the remaining 20% for training.
It turned out that all my consultants and trainers had an organizational scheme for the future that I considered would lead to our disappearance as a firm if we did not transform. As we have strengths as implementers of change - which goes far beyond the work of a consultant -, we take the bull by the horns and decide to TRANSFORM our organization.
I was absolutely aware of the fact that the creation and development of software especially geared towards affiliate companies of multinationals that were our main Clients and belonged to the 300 largest companies in Argentina at that time, was disappearing, which would mean in the near future reducing our income by 40%. It was also anticipating a reduction in revenue from professional consulting services that were also targeted at large companies that were primarily subsidiaries of multinationals. So much so, that in a few years we have been invaded by consultants who belonged to each of the Home Offices of the subsidiaries of multinationals we served.Adding 40% from software services to 40% resulting from consulting services, the consequences of a reduction in income of the order of 80% was quite dramatic. It was obvious that the subsidiaries of multinationals were going to replace more and more "external" Training and "external" Consulting with CORPORATE Training and Consulting. The forceful phrase of "Let's think globally and act locally" had been put into practice!The forceful phrase of "Let's think globally and act locally" had been put into practice!The forceful phrase of "Let's think globally and act locally" had been put into practice!
The decision taken was aimed at satisfying the 8 points mentioned above, supporting us - in a leverage effect - on "what was going to stay alive". We realized that our main competence lay in dealing with how the organizational - business world could harmonize effectively and efficiently with the world of organizational participants. And especially with a process where the Change from the first "T": tradition, or that of the second "T": transition, was insufficient for what was happening, where the competencies and services required by the Clients had to See with the change of the third "T": Transformational.
Building on our strengths in Transformational Change to integrate organizational effectiveness with individual health, we developed a new organizational arrangement and decided, knowing that we would no longer be able to count on a significant portion of past revenues resulting from services to affiliates of multinationals, focus on "enlarging the Client", giving new and WIDER SERVICES to our Clients. The subsidiaries of multinationals could have “Corporate Training Manuals” and they could also have “Corporate Consultants” that repeated in San Pablo, Buenos Aires, and Guayaquil the models that their respective multinational firms also had in Santiago de Chile, Montevideo, Caracas, or Bogotá..
The Transformational Change found its foundations in the 8 points described above that are a necessary condition to implement CRM effectively and efficiently. We have realized that our Clients ALSO have to make transformational changes to survive and even more to progress, and, on our Transformational Change competencies we have "enlarged the Client" by enlarging what we offer.
Our business services include, in addition to those we previously provided:
- Pre-Training Learning Post-Training Learning Development and Transfer of our competences to our Clients (with which as one Client said to us: “But Eric: does this suit you? If you transfer your competencies to an internal Agent of Change, or to a Facilitator or Trainer who practices within our company full time, that does not take away your work? It seems to me that that does not serve you in the long term, Eric. "We train our Clients to EVALUATE Consultants and Trainers, establishing demanding standards. We develop in our Clients the ability to “select consultants”. We alert our Clients regarding the difficulties that must arise in any project of change and transformation.We offer the Halls and Rooms of our Comprehensive Training and Education Center - some 800 square meters of our own located in the heart of downtown Buenos Aires - to our Clients at costs below 50% of market prices. We offer training support services - audiovisual equipment - such as: projectors, screens, plasmas,. Retro-projectors, screens, flip charts, sound, etc. at costs below 50% of market prices. All the partners of our firm - The OD Institute International, Latin America, must necessarily dedicate 25% of their time to the development of the training - face-to-face consulting that we call “Doing… to Learn”. Doing… to Learn.These activities that have a coverage of 25% of the total available hours of the partners of the firm must be dedicated under the one-to-one methodology: "one teacher for one apprentice" (giving the opportunity to "the other" to learn how result of "doing" things in the presence of the teacher, who in turn would give feedback on the spot). All partners of the firm can complete within 25% of their time, as mentioned in the previous paragraph, others activities such as: free talks and presentations to professional associations; free conferences to non-profit entities; publications in their specialties to share at no cost; and other tasks that "are not billed".The empowerment of a Library - Library where Clients - at no cost - can be kept up-to-date with respect to the “Best Theories” and the “Best Practices”. The provision of a service to our Clients where their professionals, executives and other organizational participants can have access to our service of “What to do after belonging to a multinational affiliate company.” Install the act of “trusting” as a relationship objective.
Some of the world's leading firms in the provision of these professional services refer to this type of CRM as "Cross-selling", "Up-selling" or "Increasing the portion of the wallet". We have preferred to initially call this service as "Enlarging the Customer" and we are realizing that "CRM with a Service Vocation" is more adjusted by incorporating the 9 elements we have mentioned. Therefore we are now choosing this last option.
This "Service-oriented CRM" orientation, which includes the implementation of the 9 elements, is difficult to apply in the business world today where projects are short-range, with the hope of immediate returns, and where There is no regular investment in medium-term development, nor of individuals, groups or organizations.
The short-term orientation, to which we refer under the name of "Get the money and run" (Eric Gaynor: "Organizations in the globalized era", Dublin, 2000), privileges the growth and development of organizational predators over the humanitarian, who prefer to give up their places before fighting for something that does not make sense, even if "win".
Organizations - and also their people or organizational participants - can benefit from this service-oriented CRM practice, which is extremely easy to verbalize and very difficult to implement.
4. In national medium-sized companies with the Owners - Founders experts in “the product”
At the end of the last decade The OD Institute International, Latin America has led various advisory works with medium-sized companies that were in great difficulties. In the particular case of three of these firms, their owners, especially two of them, were on the verge of closing their doors. Two of the three firms were industrial and one of them was services.
We have to share what our service provision towards them has mainly consisted of, since in these three cases there was a particular approach that was common to all of them.
The owners in all three cases had been the founding partners and who had actually created and developed the company's "core product". The business approach they had - and for which they had been successful and rewarded - was based on what they considered a perfect product. The generic product with which they started their signature was perfected over time, but already at the end of the last decade and as a consequence of globalization and the opening of commercial borders, their respective generic product was losing position compared to other imported products. resulting in a sharp reduction in the share of the market that each of these companies had.
This had been noted a few years earlier and the decision made was to "improve your product" to make it competitive. This battle to focus their respective products and direct efforts, money and energy towards their improvement had been extremely exhausting and at the time of requesting our services, already at the end of the last decade, the financial situation of the companies had strongly deteriorated. They had even spent large sums of money on what they called developing a better product, but unfortunately, despite the very good profile of engineers consulted, it did not seem to improve the situation.
And the vicious circle of deterioration was evident in the day to day. The problem as these owners saw it was rather in the Clients and NOT in themselves. Of course they were not satisfied with the open market economy. Our diagnosis, with which they agreed and only in part, is that the business turns from the product and towards the Client. We had long conversations and meetings with them and the management of the company and, as one of the last options at their disposal, they planned to redesign their generic product based on what they had in their head of what was really a superior product.
Two of the owners suggested that they were satisfied with our services up to that point, but they thought that our training in "behavioral sciences" was possibly "not what they needed" in this crisis situation. In recent times they had kept records of complaints from some Clients, which were systematized in a simple way in the Production Management (for the industry) and the Customer Service Management (in charge of the owner's wife) in the case of the service company.
We suggest CREATING the complaint area. This complaints area would report matrixally, both to the owner and to us. And different measures were implemented to encourage complaints - that in many instances we had to call returns. The owners were not prepared to hear complaints of their own creation. Their babies were perfect, and if they weren't totally at least they had been in the past and were now perfectible with minor modifications. They were also in the three cases convinced to focus on WHAT the product is and not on HOW to deliver it.
The result of our work showed that around 10 to 20% of the reduction in sales was due to the product, which could be solved AS ATTENTION WAS PROVIDED FOR WHAT THE CUSTOMER NEEDED. And we learned, with great pain in our capacity as creators, that what we have created is not as important as the way we provide the service, that is, the HOW. Between 75 and 85% of "lost sales" was related to the way in which our product or service was delivered or rendered. And that in most cases - and here again - the Client sent us his expression of how he wanted us to provide our service.
Therefore, from there onwards, attention began to be paid to the fact that the conventional vision where the business begins with the product and from there is directed towards the Client, may have been very effective in the past but it is no longer so. We must learn right now about implementing a post-sale service or quality assurance, where the Client, that is, the one who provides us with the resources to stay alive, is the one who also helps us with their "complaints" to keep us alive and trying to become entrepreneurs with a vocation for service. And if we add to this the fact that the contributions that the consultants include in their fees contribute to us at zero cost, we must say that it is not a small thing that we receive from the Clients that - pejoratively and equivocally - we call “complainers”.
5. At a market-leading financial institution that also operated a credit card.
This is the case of a market-leading Bank that also operated a credit card nationwide. The amount to be used for Promotion and Advertising campaigns was permanently under discussion within the budget of each year. There was a very strong difference of opinion - to say the least - between the Chief Marketing Officer and the Chief Commercial Officer, forcing the CEO to serve as conciliator.
The times were becoming increasingly difficult in the face of the emergence in the market of more financial entities that had access to money at a very low cost in relation to the cost of money to which this important national Bank had access. And for this reason it was debated whether it was convenient, among other things, to continue investing in advertising the entity's credit card.
The discussion centered on a fact that was brought to the CEO's attention by an external consultant who showed evidence where the final number of new credit card Customers was very poor (compared to other similar entities), and which was also accompanied due to high defection in relation to "applicants". Based on what "seemed" to be this evidence, it was suggested that the amounts to invest in the Card promotion be reduced by almost 50%.
As advisers and trainers on some point content, we had learned that the number of applicants for new credit cards was reasonably good relative to the investment in advertising. This additional information that the CEO did not have under the appreciation of the external consultant, who had only referred to the final number of new Clients. Therefore, and based on this new finding, it seemed to us that the problem did not necessarily go through the supposedly poor cost-benefit ratio of advertising on Cards.
On the other hand, we were able to verify that indeed the final number of "new Cards" was low in relation to the investment made. Therefore we are dedicated to trying to analyze the process by which a reasonably high number of applicants resulted in an extremely low number of new card partners.
The approval process for each application was extremely long, slow and even painful for the applicant, who was asked for information on numerous occasions… that the Bank already had. And it seemed that the “approval” process, which had to go through 5 managements and 2 sub-administrations before the final approval, could not go below an average of 45 days, with many comings and goings. The cost for the Bank of processing these 45 days was slightly more than US $ 500.00 (five hundred dollars). The Legal Management used to consume more than 45% of the total time consumed, and in many cases, this percentage reached more than 55%.
In this case, our suggestion, and with which we have been favored by our opinion, was to grant the card in no more than a week. Other Banks were delivering the card under "similar" conditions for two to three weeks maximum. Over 80% of new applicants were happy to have their card at an average monthly spending level of $ 500, therefore it was much better to dedicate this amount to the Client than to spend it on processing that same $ 500. What the Bank was doing was not investing in advertising of YOUR product for YOUR Bank and YOUR card… what it was really doing was spending on “institutional advertising”, that is,that people become familiar with the benefits of a Card… which they could access through different means… and not necessarily by who spent on advertising.
