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Refocusing   Sales   and   Marketing   in   a   Recession
Interviewer:   Steve   Macaulay
Interviewee:    Dr   Javier   Marcos
December   2008
Economic   crises,   such   as   the   one   we   are   in,   can   often   lead   to   retrenchment   and   cost   cutting,   but   there   are   alternatives   and   we   are   going   to   explore   those   today   with   Javier   Marcos.
Now   Javier,   there   are   three   areas   that   I   know   you   have   got   some   views   on   that   can   actually   help   to   strengthen,   not   weaken,   your   market   position   in   this   downturn.
One   of   them   is   about   exploiting   the   potential   of   the   customer   base;   the   second   thread   is   around   organisational   sales   capabilities   and   doing   something   to   strengthen   those;   the   third   area   that   I   would   like   to   explore   with   you   is   around   measurement   systems   and   performance   management   to   make   sure   that   marketing   and   strategic   execution   actually   take   place   in   the   best   way   that   you   can.
So   Javier,   perhaps   give   me   some   feel   for   how   you   arrived   at   these   areas   that   we   are   going   to   talk   about.
Hello   Steve.
These   are   ideas   that   emerged   from   a   discussion   that   we   had   a   couple   of   months   ago   with   a   group   of   industry   leaders   and   senior   managers.
Professor   Lynette   Ryals   and   I   synthesised   the   discussions   coming   from   the   perspective   that   if   you   just   focus   on   cutting   advertising   and   training   budgets,   the   net   effect   may   be   for   organisations   to   emerge   from   the   crisis   with   weaker   brand   equity   and   perhaps   a   lesser   skilled   sales   force.
So   in   discussing   these   challenges   with   industry   leaders   we   came   up   with   these   three   emergent   themes   which   synthesise   actions   and   approaches   that   you   can   take   to   minimise   the   effects   of   the   economic   downturn.
So   they   have   been   thoroughly   tested   out   with   practitioners?
They   are   and   these   things   are   coming   from   what   practitioners   are   seeing   in   their   organisations   from   a   number   of   industries.
Well,   let’s   get   down   to   some   detail   then.
Exploiting   the   customer   base.
Tell   me   some   more   about   that.
If   you   think   about   this   situation   we   are   in,   organisations   need   to   carefully   think   about   who   their   customers   are   and   make   sure   that   they   have   got   their   segmentation   right.
The   reason   is   that   some   customers   in   difficult   economic   times,   like   the   ones   we   are   in,   may   be   reluctant   to   pay   a   premium   for   certain   features   of   your   offer,   or   may   be   reluctant   to   pay   a   premium   for   an   enhanced   quality   of   your   products   and   services.
So   distinguishing   which   of   these   customers   have   a   higher   or   lower   elasticity   of   demand   against   the   price   is   one   thing   to   consider.
The   second   thing   to   consider   is   the   parameters   of   your   value   propositions.
If

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JM    you   go   to   buyers   who   will   be   under   pressure   to   reduce   costs,   you   may   need   to   itemise   the   different   components   of   your   offer.
And   because   your   customers   are   likely   to   be   in   difficult   situations,   you   have   got   to   really   think   about   which   aspects   of   your   offering   is   adding   value   to   their   operations   and   in   which   ways.
So   this   idea   of   segmenting   your   customer   base,   reassessing   the   parameters   of   your   value   proposition   and   focusing   on   those   parameters   that   add   a   differentiated   value   are   things   that   we   believe   are   necessary   in   relation   to   your   customer   base.
So   the   old   adage,   really   know   your   customers   and   then   make   sure   you   tailor   your   offering   to   suit   that?
Exactly.
So   it’s   actually   doing   things   that   are   often   common   sense,   but   sometimes   not   common   practice.
Particularly   in   a   downturn   then,   it   is   important   that   you   really   get   a   move   on   and   do   that   because   otherwise   you   are   going   to   lose   business?
Correct.
Now   let’s   have   a   look   at   this   other   area,   about   exploiting   sales   capabilities.
I   am   sure   that   is   one   that   will   immediately   lead   to   sales   people   pricking   their   ears   up   and   saying   what   have   you   got   to   say   about   this?
If   you   think   about   this   situation   we   are   in,   many   businesses   may   fall   for   the   temptation   of   chasing   every   piece   of   potential   business   or   every   business   opportunity.
Actually,   what   we   feel   is   more   appropriate   is   to   focus   on   real   business   opportunities.
So   to   focus   on   those   bids,   on   those   contracts,   where   you   are   better   positioned   given   your   capabilities   and   your   relationships   with   these   customers.
That   is   one   aspect,   focusing   on   real   business   opportunities.
And   the   second   aspect   is   exploiting   and   realising   those   business   opportunities   and   in   this   sense   systematic   and   carefully   action ‐ planned,   based   on   a   number   of   factors   that   can   be   incorporated   in   an   account   plan,   are   good   practices   that   will   help   account   managers   and   sales   people   to   focus.
And   there   is   a   third   element   which   is   about   raising   the   quality   of   your   sales   meeting.
Really   addressing   your   customer   needs   in   the   face   to   face   interactions   that   our   sales   forces   often   have.
Now   how   do   you   do   that?
Actually   you   need   to   invest   and   you   need   to   reinforce   the   selling   skills   of   your   sales   people   to   have   that   better   service   and   that   buyer   experience   in   the   live   sales   meeting.
Now   that   is   going   to   be   quite   a   challenging   one,   because   I   would   imagine   that   sales   training   budgets   are   the   first   that   are   going   to   get   cut   back?
It’s   one   of   the   first   things   that   are   cut   back   and   actually   we   suggest   that   you   keep   the   investment   in   raising   your   capabilities   across   your   sales   force.

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So   it   feels   like   really   target   your   best   customers,   making   sure   that   you   really   deliver   to   those   customers   against   their   needs   and   be   as   highly   skilled   and   competent   as   you   can   be?
Yes,   that’s   correct.
Now   the   third   area   that   I   would   like   to   explore   with   you   is   around   measurement   and   performance   management.
Now   I   have   to   say   I   am   rather   sceptical   about   these.
Often   it   seems   to   need   lots   of   measurement   and   not   much   output.
Give   me   some   hope   here.
Another   temptation   we   may   have   in   economic   difficulties   is   to   measure   too   many   things   at   the   same   time   without   giving   priority   to   what   is   actually   key.
From   our   discussions   we   realised   that   one   of   the   key   metrics   that   you   have   to   monitor,   to   closely   evaluate,   is   the   profitability   of   your   customers.
And   to   protect   those   customers   against   the   competition.
The   second   one   is   about   looking   at   your   customer   relationship   management   systems   to   understand   who   are   your   customers   that   are   loyal,   and   you   can   measure   that   by   length   of   business   or   some   other   metrics   to   really   tailor   your   solutions   to   these   customers   or   to   engage   with   them   in   a   different   way.
There   are   many   different   metrics   you   can   apply.
The   ones   that   we   believe   are   critical   are   those   that   help   you   nurture   the   relationships   with   your   key   clients.
And   the   third   one   is   not   just   about   measuring,   but   it’s   about   rewarding   the   best.
In   these   economic   difficulties   selling   is   going   to   be   more   difficult,   so   actually   now   you   have   to   really   craft   reward   systems   that   give   the   best   performers   more   visibility   and   some   sort   of   reward   for   the   tougher   job   that   they   have   in   these   days.
That’s   interesting.
I   think   what   you   are   saying   to   me   is   use   and   actively   work   these   measurement   systems   to   make   sure   that   you   deliver   the   best   results?
Yes,   and   use   your   measurement   systems   to   identify   the   key   actions   that   are   a   priority   given   the   situation   you   are   in.
Not   just   measure,   but   manage   that   measurement.
Can   you   leave   a   final   message   on   what   people   should   do,   that   are   looking   anxiously   at   their   sales   figures   and   looking   anxiously   at   their   projections,   their   costs   –   what   is   the   way   out   for   them?
If   you   talk   about   crisis   we   are   all   tempted   to   think   negatively.
But   if   you   think   about   it,   there   are   opportunities   that   lie   behind   a   crisis.
A   number   of   providers   will   lose   customers   –   these   are   opportunities   for   you   to   win   those   customers.
A   number   of   providers   will   put   you   under   pressure   to   deliver   added   value.
This   is   the   right   time   to   assess   the   ways   in   which   you   are   delivering   value   to   your   customers.
A   number   of   situations   will   come   together   to   force   you   to   think   about   where   your   priorities   are.
So   we   believe   that   there   are   a   number   of

SM   opportunities   that   can   be   drawn   from   difficult   times   like   these   and   we   have   just   explored   some   of   these.
Hopefully   doing   something   about   them   will   help   managers   and   executives   to   navigate   through   this   crisis   and   in   some   years   time   talk   about   how   they   did   it   and   pride   themselves   for   that.
That   is   reassuring   and   very   positive.
Thank   you   Javier.