Marketing lessons of successful political campaigns

As the 2012 political season draws to a conclusion, we are increasingly bombarded by debates, mailings, television and radio ads, phone calls and messages of all types.

When looking at this mix of promotion, advertising and sales, one is reminded that there are clear lessons learned in the political arena that can be applied to product and service marketing in the private sector.  We believe that there are at least three lessons that transition well from one stage to the other. Let me describe each.

1. Do not let your competitor brand you. In politics, a campaign will—given the opportunity—generally try to brand their opponent in less than a flattering way to confuse or repel potential voters. Do terms like: “the rich guy, or tax-and-spend” sound familiar? So, how does this apply to a business? Every business should create its own market brand and carefully grow and support it. In doing so, you are simply saying that for which you want to be known in the marketplace. It is part of your competitive advantage, if used correctly. For example, terms like this might apply: customer-oriented, lowest-total-cost of ownership, the high-quality alternative, around-the-clock service, fastest turnaround, etc...
   
   Establishing and communicating your brand is a strategic decision and can become the basis of success or failure. If you fail to brand your company, products or services, you can expect that a wily competitor will see the opportunity and do it for you—in less-than-favorable terms. How does being described in terms like: “high-priced brand or just average quality” sound to you? They likely sound pretty good to your competitor.
   
   Can you articulate your brand (in writing) today?
   
   
2. Segment your market. In the past, we have assisted and advised school districts with campaigns to pass voter-approved bond issues for both increased operational spending and construction capital. In designing marketing programs to reach out to potential voters, we always advise the district to focus its entire attention on that core group of residents who consistently vote in every election. Do not waste your money and time elsewhere. As an interesting sidelight, we have often found (based on voter-record research) that many vocal critics or thought leaders regarding political issues or causes do not vote.
   
   And just as political campaigns must husband their limited resources between voters and nonvoters and swing states and non-swing states, a company must also aggressively apply their marketing and sales resources to the right customers. By right we mean those top accounts with the highest potential to produce increased market share sales and profit contribution. So if you can execute 1,000 sales calls per year, be sure the right accounts are getting 800 of those calls.
   
   Do not waste time on “nonvoters.”
   
   
3. The best field organization will always win the election. To win an election you must have a large, effective and well-managed field organization in place prior to and on Election Day. This army of operatives is generally calling upon voters, putting up signs, canvassing for support and making sure that “their” voters get to the poll to vote. To be successful takes both people and a focus on those key actions that will likely result in a favorable vote for their side. They work pretty hard in their known market segment, and know that every action counts.
   
   The private sector equivalent of the political organization is your field sales force. They are visiting with select customers and doing the right things every day that build relationships with customers and close sales. And, the great sales forces are consistently making more sales calls per day than their competitor. That sales force will close more deals (guaranteed).
   
   Do you have the best sales force in the industry? If so, you will always get more “votes” than your opponent.

So, next time you see a political ad or a politician courting votes, watch what they say and do and think of how their approach or technique can be seamlessly applied to your company.  The similarities will surprise you.

A Logistics Tool for Improving Sales Force Productivity: The Sales Atlas

We have often said the best way to measure sales-force productivity is by increased sales calls. In short, a professional sales force that makes more sales calls will always be more productive (and successful) than one making fewer calls.

A number of years ago, we completed an assignment with a client where we redesigned multiple sales territories for a team of sales representatives that managed up to 150 current or prospective accounts each. The objective of our work was to assure that required sales calls could be made on all key current and prospective accounts, and that sales-force travel time to and between sales calls was minimized. As a result of territory redesign and alignment, this regional seller and distributor of printer supplies and equipment easily realized a 15% increase in productivity—i.e.: 15% more sales calls from the same eight sales representatives.

One of the planned outcomes of the project was to provide a sales plan for each sales representative that outlined a suggested sales-call schedule on a week-by-week basis. This plan scheduled and prioritized sales calls by potential, need and geography to maximize the efforts of the sales force. However as we all know, any action plan will require adjustment “on the first day of battle” based upon customer need and unforeseen events.

With this reality in mind, we worked with the client and sales force to provide an additional tool to help the sales force work around those inevitable sales-plan adjustments and emergencies—and still achieve their call plan objectives. We called the tool the Wilkening & Company Sales Atlas.

The Sales Atlas was sent to each sales representative at the beginning of each week. It displayed an updated list of all territory customers and prospects (or locations) where a sales call is required and planned. For each account or prospect, the following information was shown:

1. Contact information (names, address, zip code...);
2. Year-to-date sales and annual sales potential or goal;
3. Annual sales calls required and planned; and
4. Most recent (and total annual) sales call(s) completed, to date.

Accounts were then identified by location and grouped in general proximity of one another. This was done by applying geographical information system (GIS) tools to the account database. Account clusters were generally created using:

• City or town;
• Zip code; and/or
• Distance and direction from a specific location (like the branch office in Garden Grove, CA).

Of course depending on the overall geographic location—e.g.: West Los Angeles or Western Idaho, the rules for grouping accounts will differ.
With this weekly report in hand, the sales force was able to better use its time. Two real examples follow.

• Let’s say a sale rep planned to call on a single priority account first thing next Monday. The Sales Atlas was then used to help the rep fill out the remainder of their daily sales calls by displaying other accounts in need of a sales call that were in close proximity to their priority account.
• When an account emergency arose (that required on-site attention) and the sales rep found themself 50 miles from the office with 4 hours left-in-the-day the Sales Atlas would help the rep find other nearby accounts where a sales call was needed or possible.

As you can see, the trick here is not for the sales rep to have an available list of customers, everyone has one of those these days. The trick is to know how those customers geographically cluster together. That information can help the sales force add that one extra call per day.

The above examples are two ways that a Sales Atlas has been used. But, there are dozens of ways for it to be a useful tool for the sales force. You are only limited by your imagination.
 
If you want to help your sales force make more sales calls by substituting customer time for windshield time, Wilkening & Company can help you create your own Sales Atlas. And you will quickly begin counting the increases in sales calls—and ultimately sales.

Wilkening & Company has helped dozens of clients improve their sales-force effectiveness and productivity and is a pioneer in applying geographic information systems (GIS) to the challenges of sales force logistics. For more information regarding Sales Atlas and other tools, write (bob@wilkeningco.com) or call at (847 823-5090.

How to Manage the Unique Compensation Challenges of a Family Business

Last month we discussed the causes that make the management of compensation in family-owned and operated businesses different and potentially more difficult and challenging than in other businesses. These factors almost always lead to trouble unless recognized and addressed.

In response, Wilkening & Company has developed four (4) principles for the effective management of pay in family-owned and operated businesses. By using these principles, we believe that the problems discussed in our August issue can be avoided. Let’s review each.

1. Know what you mean when you say “pay or compensation.” The definition of “pay or compensation” is quite simply: salary and cash bonuses. Do not be drawn into a discussion over whether your sibling’s ownership-based distribution (or draw) or country-club membership is compensation. They are not! But in family businesses both pay and non-pay cash distributions are freely mixed all of the time, and vociferously debated. Why is this important? Stick around for a minute for principle #2.
   
   
2. Know the facts. If you want to evaluate a sibling’s pay or compensation, use the tried & true method of comparing it to the market for similar jobs and businesses as reported in pay data surveys. Compensation data from these sources primarily represents salaries and annual bonuses or incentives. Ownership or non-cash distributions (like benefits or perquisites) are not collected nor reported.
   
   When using any survey, make sure the data you use is reliable, fairly (independently) collected and based upon enough observations or data points to make the use of statistical terms like “median” possible and meaningful. Generally using the comments of your next door neighbor or a job-search website (or similar sources) for your data is highly suspect. So if you think someone is paid too much, see what other companies have actually reported paying (in salary and bonus) for the same job. Know the facts.
   
   
3. Be transparent. Transparency is a term thrown around freely in the arena of politics these days, where it means little or nothing. But, what does it mean in the arena of family compensation?  It is generally known that by the time a family-owned and operated business reaches its 4th generation, there can be as many as 30+ participants involved in the affairs of the company by right of ownership, marriage or future succession. These participants are often called stakeholders. And, each will likely have an opinion regarding compensation and other operating matters, and many are not shy about stating same. To assure that these opinions are based upon facts and not reactions to a data surprise (e.g.: “I did not know Uncle Jerry made $200,000 last year!”), be sure key family stakeholders know all of the information they need to know about family-member (and other key executive) pay within the enterprise.
   
   Publically-owned companies routinely publish key officer, director and other executive compensation data to all (or select) shareholders each year in a “proxy” statement. Take the same approach with your stakeholders and publish your own annual proxy statement for limited distribution. But remember to remind the reader that this is strictly privileged information and may represent a competitive advantage. Being a stakeholder goes beyond just having opinions, and has its responsibilities.
   
   
4. Define fairness. It is well known that an individual’s perception of fairness is primarily determined by their own reference or perspective. For example:
   • “If I make $50,000 a year in my job, $550,000 paid to our company’s CEO (my cousin) is unfair.”
   • “If we need to spend $4 Million in capital next year, $550,000 paid to the CEO (still my cousin) is unfair?”
   • “If the banker next door made $1,135,000 Million last year, my paltry $550,000 is unfair!”
   • “Aunt Mary Beth told me you make too much money, and it is unfair.”

In the end, “fairness” depends on where you are standing. And, your ability to influence perceptions or opinions (once made) is limited. So, actively influence perceptions of fairness before the fact. How? First (and of course), consistently apply the first three principles above. But even go a step further. Define what the company considers as fair through the select disclosure of company pay data and its accompanying market analysis to key stakeholders and opinion leaders. Some may disagree, but everyone will understand the scope and terms of the debate. And, the benchmark for fairness will surely have been established.

Compensation can be a perplexing and time-consuming subject within the family-owned and operated business. As you can see above we believe that if a company follows some simple and easily-implemented principles, family members can avoid common family-compensation pitfalls and free up time otherwise consumed with this often contentious subject. With that extra time available, the family can now focus its efforts on growing the business—and ultimately creating new 24-karat pay problems for the future.

If you have read the above and you are not part of a family-owned and operated business, try applying the 4 principles within your business and with your Board. I am sure these principles are just as valid. Try it.

Wilkening & Company has advised family-owned businesses on matters of private and family-company compensation for over 3 decades. In addition to compensation, we also have experience with family-business succession, organizational effectiveness and Boards of Directors. If you have questions or challenges, call us at (847) 823-5090, or write at bob@wilkeningco.com.

Sales Planning for the Coming Year: Try the 1-Page Report

As the 3^rd Quarter draws to a close we suggest you begin to think about key-account planning for the coming year. Begin planning a few months early this year with this 2-step exercise.

First, identify your top major accounts over the past couple years. Make your own rules regarding how to define them, but we suggest you start with those top accounts that comprise (say) 90% of your sales volume. I suspect that list will contain 50-100 accounts or customers. Make a simple account list on a spreadsheet and collect some data on each, e.g. :

• Annual sales volume (that’s obvious);
• Annual gross profit (or more granular profit contribution, if available);
• Annual sales per order or release;
• Annual shipments made;
• Annual sales call required; and
• ……any other performance metric you think is applicable.

When completed, sort your list by profit (column #2). This is the 1-page Report
Then, hand the 1-page Report to your top sales executive and ask them to look at the results and seek obvious situations where improvements can be made (e.g., more high-profit sales, higher pricing, less company resources applied, too many small orders written, etc.).
Second, request a 2-part response from the sales team.

1. Ask your top sales executive to identify and report on the top-5 selling (and profit improvement) opportunities revealed in the report and briefly describe what actions or investments are required (report within 2 weeks); and
2. Ask your top sales executive to then ask their reps and managers to look at their individual accounts on the report and respond with a 12-month plan to grab the opportunities they see (say, report within 6 weeks).

Your 1-page Report can go a long way to helping identify opportunities to improve company profits in the coming year, and will surely form the basis for 2013 account and territory planning. You should be able get a nice ROI for a few hours of analysis.