Would you take operational/marketing advice from someone without such experience?

We are starting a process to get some additional capital into the company, apart from operations and profit generation. That is going well.

One of the aspects of this are discussions with people over our strategy and other elements of the business.

Some of these conversations are amusing. Some are annoying. Few are really helpful or insightful. That is, a great deal of time and effort is expended, with little return back for expending the time and effort.

Yeah the cost-benefit analysis isn’t well balanced here.

So part of the conversations turn to sales process, pricing, … . And this is where things get interesting, and often demonstrate the clear lack of sales and marketing experience of those giving you advice.

Suppose there are two products, A and B. Product A is from BigNameManufacturer. Everyone know them. Product A isn’t that good, it is more of a placeholder than product B. Product B is good, and is from a small company. Call it X. X is not a well known company, and B isn’t as well known as A. But B is much better than A. Far better.

You are a sales person. You work for X. You have to sell B in competition with A from BigNameManufacturer. You may be a marketing person helping to set the pricing for B.

You know B is better than A. Your customers know B is better than A. Some of them happily tell you, and tell the world.

Since B is better than A, should its price be higher?

This is a question that, well, people without operational experience, whom have never participated in a real marketing or sales team of a product, in a similar scenario … who usually have nice MBAs from various schools … this is the question they get completely wrong.

This is in part, because they don’t understand what it takes to sell a product, to get mind share, to get market share, to beat an entrenched competitor.

You have to set all aspects of the product so that the decision obvious. You have to make it so no other decision is possible, unless the decision maker is not acting in a rational manner.

Quantify better. Is better worth a positive price delta? Will that guarantee a sale?

Its that last part that the people without operational experience … thats the part they don’t get.

Better doesn’t guarantee you can charge more. Its one of several factors in getting to the decision for the customer. Price is another.

I won’t get into the context of this conversation more.

I just wonder why such people are offering this sort of advice, never having experienced what it takes to sell something.

Sort of like an ‘internet consultant’ who doesn’t own or know how to operate a computer. Yeah there are such things.

Viewed 12841 times by 2944 viewers

Facebooktwittergoogle_plusredditpinterestlinkedinmail

4 thoughts on “Would you take operational/marketing advice from someone without such experience?

  1. I had a friend in business dev a few years ago who talked a lot about the probability of a closed sale for a given number of hours expended. He wasn’t a MBA, he was an Engineer. His theory was that customers have an idea of what they’d be willing to pay for obvious value. If there was an established price point it was hard to go over that and keep your probability of closing up high without having to blow the extra $$$ you made on more sales effort.

  2. I have absolutely no experience in sales and marketing, but it seems to me:

    If the average target Joe-the-customer is someone whose job it is was to reduce risk for his boss/company/etc, I think I’d need every single sales point to be a reason to not go with BigNameManufacturer, the guy I absolutely knew was going to be around in 3-5 years, with “proven” success and tooling, etc.

    If the average target Joe-the-customer is someone independent used to taking risks to get an edge in a very competitive discipline (Academics for example), you might be able to push him higher…

  3. @David

    This presumes the risk is in the support. Now suppose BigNameManufacturer goes away. Believe it or not, there is as much risk as them going away as the small guy. That is, buying on the basis of size doesn’t make much sense.

    As I noted elsewhere, the risk is in bricking. This is what it all boils down to. If you have a machine and the company goes away, can you get support going forward. For some company X’s, the answer is yes. For all BigNameManufacturer that I am aware of, the answer is no.

    Risk is in the bricking. Which is why some company in the process of being purchased now, is seeing its sales crater.

  4. “some company in the process of being purchased now, is seeing its sales crater.”

    Points taken – my eyes are open 🙂 I guess I hadn’t considered that the BNM’s proprietary tooling becomes the single point of failure when they fall.

    Reminds me that I’ve been meaning to call Company X for a quote… 🙂

Comments are closed.