Market-savvy S&OP, the advanced form of S&OP which delivers competitive advantage, requires a new organizational culture for success. A collaborative team working at market is required.
Remember the old party game where people stand in a circle and whisper a message from one to another around the circle. The last person in the circle tells the message out loud. It is always garbled and silly. Then the originator states the real message. ALL LAUGH..
Not so funny in reality….. In several recent engagements with medical device manufacturers and a hard line manufacturer, I have been reminded of the typical salesman only approach to customer inter-faces. A majority of companies do not allow managers from outside the sales team or perhaps sales and sometimes marketing to actually work directly with customers.
Having only one small, parochial group of people interfacing with the customer, the full meaning of customer requirements and customer feedback remains unknown. The message which comes back is garbled and silly.
Information from the customer is most often highly distorted. It is only natural for a sales person to be optimistic and to bury any bad news coming from the customer. But worse, some of the most important parts of the customer communication are most likely not even understood by the sales person who would have very limited understanding of new product technologies under consideration, supply chain alternatives and capabilities and the overall competitive situation.
Conversely, the people inside the company in Operations, Supply Chain, Finance and other key functional areas most often do not understand the issues facing the sales person or the customer.
It is the Economy
In today’s economy, the customer and the competitive situation are simply much too complex for one sales person or even one sales person and a product specialist to fully grasp and understand.
In today’s On-Demand economy, customer values must become the basis for defining competitive advantage. Developing the strategy or competitive advantage for a company will be the subject of another blog. Today, I am focusing on how to gather market intelligence.
In today’s selling environment, market segments are specialized not simple demographic divisions but all new customer value defined segments. Today, a provider must enable complexity not try to rationalize SKU’s. Increasingly, demand patterns are becoming more random and change is coming faster.
The traditional separation of functions and restrictions on customer-facing activities must now change.
Collaborative Teams at Market
Market intelligence can most effectively be gathered by cross-functional teams working in the field in support of the sales people.
These teams should have the following characteristics;
- Strong support orientation, not take charge people; the sales person is responsible for the relationship.
- One person from each of the key functional areas; marketing, R&D, supply chain, manufacturing, finance and product development and of course sales.
- Savvy people, hopefully some are market savvy. Shy clerical types will not work.
- Schooled in market-savvy S&OP
- Familiar with the customer relationship
- Knowledgeable of the competitive situation
- Open minded, almost to a fault
The team should meet together before any field work is started to develop some skills and tools;
1. The mandate to listen 85% and talk less than 5% of the time, silence is a virtue at 10%.
2. They must learn how to ask “open ended” questions.
3. And, they need an interview guide. The interview guide will document, the following;
- The content of the maximum two minute introduction
- What questions will be asked; the 5 Why’s approach should be clearly understood and used
- What specific probes into the customer’s value definition will be pursued; what is dear to him, how does he treat their customers and how does he generate cash
- The recommended structure of the desired future meetings; quarterly, with whom….