Who will take the Most Valuable ITO Services Partner position?


Today, I believe that there is a Position available in the ITO Marketplace for the "Most Valued ITO Services Partner". This Position can be taken by a Service Provider (SP) who can provide:


(a) Business impact beyond X % outsourcing savings. Clients want further reduction in costs through process optimization and re-engineering. The SP needs to come up with the plan for such an effort proactively. This may lead to a revenue dip, albeit temporary.

(b) Insight into effectiveness of client controlled processes. By virtue of its position, the SP is closer to client data than the client themselves. Therefore, the SP can suggest stream lining of interlocked processes that are still under the control of client.

(c) Brand Ambassador SP Team. The SP Team is virtually the face of the Client's IT Department. Employees, Partners and Suppliers interact with this team on a daily basis. Can the SP Team deliver a world class experience while they resolve issues?

The SP who is focused on ensuring the success of the client while anchoring its own financial success will take the “Most Values ITO Services Partner” position. A competent, empowered Relationship Management Team who is focused on Win – Win outcomes is the key to making this happen.

Cheers

Paul Simon Arakkal

The Art of Segmentation for BPO Services

Segmentation, to my mind is a Key Success Factor to Marketing Effectiveness in B2B Marketing. Let me now move to the work I have done in marketing BPO services to the English speaking countries from India.

The market perspective:

Typically large and medium organization in the United States, United Kingdom, Australia and Canada buys Offshore BPO Services. On scrutiny, we noticed differences in the buying cycle, buying process, velocity of decision making and selection criteria among the companies that formed the prospect base.

The Service Provider perspective:

In order to meet our goals across revenue, profitability and time to revenue, we needed to focus on scale, offering mix and propensity to offshore respectively.

Based on the above two perspectives, we segmented the 600 account prospect base that we had across the four segments mentioned below:

(a) First Time Offshorer. This category of prospect is bringing work offshore for the first time. Typically followers (behind the early movers) they want to leverage the learned service provider who is already serving the early mover. They wanted to cut short the time to benefit from offshoring.

(b) Looking for a Second Partner. These prospects have a sizeable offshore presence through an existing partner. While keeping the existing relationship stable they want to build new relationships for business continuity planning reasons. Since their driver is to reduce operational risk, they are looking to work with mature providers.

(c) First time outsourcers. This category of prospect has missed out on leveraging the wave of onshore outsourcing earlier. Perhaps their business was doing extremely well or they had business compulsions. Typically, they take a longer time to decide.

(d) Looking for the nth offshore provider. Typically a prospect, who has been Offshore for more than 4 years, has a few partners and now is looking to shut down a partner and hire a new one. This is typically a price driven segment.

After segmenting the 600 accounts across these four categories, we decided to focus on the (a), (b) and (c) categories. We decided to ignore the (d) category. The Strategy is successfully running in a couple of companies I have worked with. Their shareholders are smiling.

Cheers

Paul Simon Arakkal

Creating Loyalty for a Small Manufacturing Company

How will a small manufacturing company create loyal customers? How will they reduce the cost of customer service into the future while doing so? Loyalty gets created even for the biggest of manufacturing brands in the world through the introduction of high impact customer services. Therefore it is worthwhile to discuss this aspect under the aegis of Services Marketing.

Let us make some assumptions to start with.

(a) The Company is making a consumer product
(b) The Price of the Product is under $ 1000
(c) We are referring to a utility product (typically a local brand) - something you need at home.

(d) It is not a lifestyle (branded) product like a Kodak Digital Camera.

Having made the above assumptions, the best loyalty programs that work would be:

(i) Usage Training: Whenever a customer buys the product, have an employee train the customer on using the product effectively - this will ensure the customer utilizes the product frequently and effectively.
(ii) Have a telephone help line that is manned 7 days a week. Have an answering machine that takes calls during off duty hours. For the email users have an email id that responds within 24 hours. Have auto response enabled on email with typical response commitment.
(iii) Stick the telephone number and the email id on the bill, warranty card and on the product itself.
(iv)Have a ticketing system for calls on the phone, Voice recorder and email and inform the customer about the ticket number and when the problem will be attended to.
(v) Have trained personnel to attend to the problem and keep the promise that is made through the ticketing system.
(vi)Create communities of users in neighborhoods where they regularly meet and exchange usage best practices. These could be:

(a) Cooking classes for cooking products
(b) Gardening classes for Gardening products etc.

Sponsor the major costs of the events while allowing community members to share the minor costs between themselves. This will help them learn from each other and create friendships.

(vii)Invite prospective customers for these events. They will love it – typically.
(viii)Have the local press cover these events - they will cover these events since they address the needs of the community who are their primary subscribers.
(ix) Create a second sale market through your resellers for lower income groups and allow your higher value customers to replace their products with newer versions that you release from time to time. The used products will get sold through resellers to lower income customers. If you do not want to create a second sale market, use the buy back option to replenish your inventory of spares. You would be buying spares on time and at lower costs therefore your costs to serve would be low.
(vii) Have a solid supply of spares or the better still use parts available in the market to manufacture those parts which have the highest wear and tear so that you do not have to hold too much inventory.

It is quite clear that all the programs that we discussed are services that the manufacturing company needs to put in place to create a "wow" experience every time the end customer contacts the OEM. Leaders have long realized this and put their investment in processes, people and systems to make this happen every time. Small and Medium Manufacturers can leverage these tools and techniques to create loyal customers today!

Cheers

Paul Simon Arakkal

Improving Sales Effectiveness - Key Success Factors

Here you are running the marketing and sales function for your company. The competition is intense. The resources are scarce. Time is running out. Sales need to improve by leaps and bounds in order to meet the goals. Quite often such situations lead to extreme pressure on the sales persons often leading to low morale and attrition. How does one accomplish sales effectiveness like a hot knife goes through butter? Is there a way that can accomplish the goals through processes which enable your sales force to perform better? Sure, read on!

Increasing Sales effectiveness can be accomplished through (a) Improved Marketing Processes and (b) Improved Sales Processes. Let me address these one by one.

Improved Marketing Processes:

(a) Have a 60 seconds differentiated brand promise for the company.
(b) Crystal clarity on target segments and their needs and purchase drivers.
(c) The Service or Product Offering must have a clear and differentiated brand promise.
(d) Operational brand promise which appeals to the technical buyer or influencer.
(e) Business level brand promise which appeals to the Economic Buyer.
(f) Price should include the cost to serve over the life of the contract/product.
(g) Build relationship management, user training and ongoing support into the price.
(h)Define the sales process with sales tools necessary at each stage of the sales process.
(i)Develop confirmation tests to confirm whether opportunities are indeed moving forward.

Improved Sales Processes:

(i) Have a dedicated Inside Sales Team, responsible for opportunity qualification.
(ii)Have a separate Opportunity Management Team, responsible for conversion.
(iii) Have a robust opportunity qualification process. Say “No” to mirages.
(iv)Commit resources only to opportunities worth winning/chasing.
(v)Review movement of opportunities from stage to stage objectively.
(vi)Review losses and wins without witch hunting.
(vii) Sign contracts only when win – win is possible for company and client.

Cheers

Paul Simon Arakkal

Lead Management - Key to Success Replication

Service Providers are constantly challenged to win profitable business. As a thumb rule, one can say that if a service provider focuses on winning new business with its existing capabilities and offerings it will be more profitable. This is because the existing clientele would give a positive reference and the new prospect would obviously pay more. The key perhaps is to have a Lead Management Team in place.

To ensure we are on the same page, let me define my understanding of a lead. When in an account, there is (i) a significant pain, (ii) a budget has been allocated to alleviate the pain, (iii) the plan is to spend the budget in the coming 6 - 9 months and (iv)we (the company I work for) have a solution to alleviate the pain - I call it a lead.

The crucial next stage is to qualify a lead which means answering questions such as (i) Is the Prospect looking for the value that my company can provide or are they looking for a price quotation? (ii) Should I set aside resources (budget, people and time) to pursue this deal? – Can I win this deal? If the answer to both questions is yes, then the lead becomes a "qualified opportunity".

Wins come from Qualified Opportunities and Qualified Opportunities come from effective lead management. I am sure all of us know that. Now, how does one do lead management (different from lead generation) in this "real world"? Here are my suggestions.

1. Focus on creation of opportunities that one can win. There are too many companies in the marketplace responding to opportunities coming their way. The results are typically low morale, unexciting results and low ROI on Sales and Marketing. A lead Manager will be respected only in such a company. Elsewhere he is wasting his time.
2. Put a Lead Management Team in place instead of Lead Generation team. A lead management team has the complete authority to push anybody in the company (including the account manager) to create the lead and manage the lead till it is qualified and handed over to sales. Authority and responsibility should go together.
3. Right Organization Design. Keep Lead Management as peers to Sales and Account Management. Lead Managers need to manage leads through multiple channels - Email, Voice, Events and the website. This will ensure the two teams respect each other.
4. Right Measurement. Measure Qualified Opportunities as the Key Output of Lead Management. In other words, Lead Managers should be compensated only for qualified opportunities. Not for leads, not for setting up meetings for example. This will ensure result oriented action within Lead Management.
5. Peer Sign off. Have the Account Manager sign off on the Qualified Opportunity and take over the same from the Lead Management Team. The Lead Management team should get compensated for their work at this stage. This is the crucial step that gets the Lead Management Team the respect it deserves from its prime customer – the sales team.
6. Creative Tension. Conduct weekly reviews on Opportunity Management where Sales can ask Lead Management for new qualified leads and Lead Management can ask Sales to sign off on qualified leads. This will create push back from both sides - this is good for the business and must be welcomed.

I have migrated from lead generation to lead management as I have described above - learning the lessons on the way. I have done this for leading Offshore IT Services/BPO Multinational companies selling into U.S, U.K, Canada and Australia.

I used to ask my Lead Management Team to strut around the company a bit. They were worth every penny their employer was paying them! We had the figures to prove it!

Cheers

Paul Simon Arakkal

Service Offerings : Revenue Generation Engines

Services Marketing is about Business Impact, Revenues and Profitability. Now, isn't that the job of the CEO, you may ask?

Services Marketing is about (a) Creation of Service Offerings, (b) Enabling channels to take the Offerings out to the market (c) reaching the end prospect and letting them know of the benefits of the offering to generate demand and (d) once demand is created, the opportunities are qualified and managed to close deals and to book revenue.

Let us understand the need to create Service Offerings. Service Offerings are clear descriptions of how a service will be delivered for the prospective client, the value it brings to the table and how the price for the same. Service Offerings are about a Company choosing its battleground, deciding to chase what it can win.

Too often, BPO Service Providers chase business coming its way rather than chase the business it wants to win. Every year, between 70 to 100 deals are signed with international companies for delivery out of India. A vast majority of these deals are struck through RFP Responses. Since the client has clearly defined its buying process and therefore can compare all on the nearly the same platform, there is little or no room to offer greater value to the prospect. It becomes a price war and win rate in RFP scenarios is typically as low as 5%.

What if the Service Provider were to choose to step away from the RFP race and then chase business that it can win? What if it were to create a clear image of how it can deliver services for a prospect client? What is the Service Provider were to create a business case for how the services will be delivered and how much impact it would have on the balance sheet of the client? This is what Service Offerings can do for a Service Provider. In short, they are revenue generation engines. A select few service providers are doing this around the world. Their profits are remarkable higher than their peers.

So how does a Service Offering look like? Service Offerings have two components - broadly called the Sales Kit and the Delivery Kit. The Sales Kit is used at various stages of the sales cycle - typically referred to as the Awareness, Interest, Desire and Action cycle - AIDA Cycle. The Service Offering Sales Kit typically consists of:

1. Snapshot of Business Value delivered and Operational Value Delivered to an existing client


2. Process Capability Value Chain - describing capability that exists within the value chain


3. Detail of How the Value was delivered for the existing client


4. Overview of the Hire - Train - Manage framework describing how value will be delivered.


5. Questionnaire to assess the solution required for the client including the team size.


6. Best Transactions (Voice Calls or Screen Shots of work being performed )


7. Typical Band Mix of Operations Team, Support Span, Management Span.


8. Business Case Builder which proves that the Service Provider has the lowest TCO. TCO = Total Cost of Outsourcing.


9. Existing Client References.


10. Profiles and Experiences of the Management Team that is relevant for the prospect.


11. Answers to probable RFP questions in the form of a quick reference repository.


12. Prices developed for FTE/Hour, Price/Transaction, Risk Reward model etc.

Services Selling is always done through face to face sessions or in modern circumstances over the telephone. Therefore a majority of the above would need to be in form of presentations - giving the menu but not the recipe. The presenter then conjures up the magic with his/her skills giving the prospect a vivid description of why the prospect should choose the service provider.

The Best in Class Service Providers focus on differentiation. To my mind, the difference between sales success and failure is in the homework - the Differentiated Sales Kit. You need an experienced and innovative services marketing team to be able to develop the Differentiated Sales Kit. Revenue, Time to Revenue and Profitability hinges on enabling your sales team with these warheads.

Rainmakers are probably a myth in the BPO Sales world - people who can sell anything to their trusted relationships. Revenue Generation Engines such as Service Offerings and Differentiated Sales Kits are a much better bet than Rainmakers.

Cheers

Paul Simon Arakkal