Wednesday, 7 February 2018

Why market pulse is more critical than a superior product design?




In the early 90s Airbus and Boeing, the two major players in commercial aircrafts decided to come together to manufacture Very Large Commercial Transport (VLCT). Later on both the competitors parted ways as their business strategy could not synergize. Ultimately in 1994 Airbus decided to go solo on this venture and the project was codenamed A3XX. And thus the first flight of A380, the largest commercial aircraft happened in 2007 which is a double-deck, wide body 4-engine aircraft with 6000 square feet of usable space, 40% more space than its nearest rival product Boeing B747-8. A380 could accommodate 500 seats in 3-class capacity (Economy, Business and First Class) or 850 in an all-economy class.
With several delays the project cost escalated from the initial 9 billion to 13 billion Euros. 
Product Pricing and Positioning: The A380 had a seating capacity which was 5 times the Airbus A320 Neo but the price point was 4X . The List price of A 380 was $430 Million whereas A320 was $107 Million. The product was received well after its launch. However in the last few years the customers, the airline companies are either cancelling the orders or postponing the delivery dates. The peak production which was at 30 aircrafts per year has dwindled to 12 per annum.
In spite of excellent product features, good quality (50% quieter than competition product) and the right price, why did Airbus started losing on the business for A380? The anticipated exponential growth in passenger traffic from hub-to–hub was the cornerstone on which Airbus decided to make A380. Hub-to-hub traffic for Air India is like New Delhi–London, for Singapore Airlines it can be from Singapore to Dubai or Frankfurt etc. One aspect that was overlooked was that of the point-to-point traffic. When the traffic between two points crosses a minimum threshold, airlines can afford to have small or midsized aircrafts which are more economical than transferring through the hub.
Even though the air traffic grew considerably; instead of it growing from hub-to-hub it started increasing from point-to-point. For example 10 years back, Air India used to have seven flights from Delhi to London and passengers were picked up from Hyderabad, Bangalore etc. Now all this airport being choc-a –block, it makes better business sense for airline companies to transport passengers directly from Bangalore to Cardiff/Manchester rather than routing them through hubs like Delhi and London. What is the learning for Sr. management from these?
1.     A technically superior product with better specifications even though necessary is not sufficient for long-term success.
2.     Appropriate price positioning even though crucial need not be a game changer.
3.     Factor X: Identify the factor x which is insignificant today but can become significant in future (that is generally overlooked) which can seriously affect your business strategy. ( In this case it was the point-to-point traffic) In case of Nano car, legend says that Shri Ratan Tata while doodling decided to launch a cheap car while seeing a family of four on a scooter. One factor which was overlooked was for majority of the Indians having a car was more of an aspiration and a status symbol ( emotional decision) than a cheap car as a mode of safe and convenient transport.(logical decision) Doodling can sometimes be an expensive proposition!
And last but not the least, there is nothing called as a right or wrong decision. All decisions are evaluated in posterity. Time is the best judge!
Training Programs on: Value Selling Techniques in Major Sales:Chennai, Mumbai and Pune-
Nassim Nicholas Taleb author of books like Black Swan, Fooled by Randomness or Anti _Fragile says for most of us absence of evidence is interpreted as evidence of absence(Please read the book review: Anti –Fragile: How to Live in a world we don’t Understand) http://www.paradigm-info.com/recommended-books) Be Humble!

Monday, 5 February 2018

Can you Improve Your Negotiating Leverage thro' Sales Funnel?





I was conducting a program on EFFECTIVE VALUE SELLING FOR CAPITAL EQUIPMENTS last week. One of the main problem the sales executives were facing was that the customers were  insisting on  a target price for the machine rather than through a quotation. The sales executives were falling into the trap and asking their managers to give a revised ( read discounted) price.
This problem apart from the market dynamics is also decided by the BATNA of both the parties. Best Alternative to a Negotiated Agreement was first coined  by Roger Fisher and William Ury in their book Getting to Yes: Negotiating an Agreement Without Giving In. The authors from HBS work on the Harvard Negotiating Project.
BATNA is a concept which discusses the options both the parties have in case the negotiation fails. In such  a situation the party ( buyer or the seller) who has more options has a better negotiation leverage. For example if the buyer has 3 other vendors to talk to; and  the salesman has this buyer as the only option, then the BATNA of the buyer is higher.
Sales Funnel is a very important tool to not only improve your BATNA but also the order forecasting. A program on Value Selling Techniques for Major Sales on Chennai-15, Mumbai-17, Pune-20 February 2018 @ 9 AM for more details please visit www.paradigm-info.com

Friday, 2 February 2018

Contextual Selling: A New Sales Paradigm for the 21st Century

sales Book


A brief chat with Mr. Rajan Parulekar, Managing Director of Paradigm Trainers Ltd., a firm specializing in Sales & Behavioural /Soft skills training since 1995.    Author of Contextual Selling: A New Sales Paradigm for the 21st Century

When did you decide to start writing this book?
I wonder if there is any salesperson who can say that he hasn’t lost an order. One learns the hard way in life and I have lost a lot of orders too. Back in 1983, when I started out, selling was easier. It was more of a sellers’ market, with fewer brands and less competition. You could revert to the customer’s query the following day. These days, especially post-liberalization, the market has become hyper-competitive and cut throat. The customer expects all queries to be resolved instantly. If not, there is a competitor ready to grab the opportunity!
I started writing the book in 2005 and the book was released 6 years later. The reason I decided to write the book is, even though I learned by trial and error, the younger generation need not go through that. They should have a template of a structured sales process.
The inspiration for the book?
My sales career started in 1983 with Toshniwal after completing my Electrical Engineering. Toshniwal, were the pioneers in instrumentation in India. On my very first day, the boss handed me a brochure and said “ Go to the field and sell.” I was supposed to sell an Oscilloscope, a device used for testing electronic assemblies, products etc.  I hesitantly told my boss that I don’t know anything of my product. . He said “It doesn’t matter, don’t worry, you’ll figure it out.” So, I stepped out into the field, and as I feared, the customer asked me some very difficult questions which I was unable to answer. Embarrassed, I nervously told the customer that I would get back to him. That was my first day at work!
Here, I’d like to share a very interesting anecdote. I wrote about this in the introduction in my book too. Once, I had to sell oscilloscopes to Dr. Mohinder Singh, Head of the Department, Physics at Khalsa College, Mumbai. He obviously knew oscilloscope thoroughly and asked me few technical questions which I was unable to answer. Being a very kind man, and sensing my apprehension and lack of familiarity with the product, he sat me down. For the next hour, Dr. Mohinder Singh patiently educated me about the product. He added that the oscilloscope I had carried was indeed  a great product and proceeded to place an order for five pieces! That was the story of my first sale!
I must add that even though I was not technically familiar with the product, I allowed the other person to go on talking without interrupting. That, I feel, is important during the selling process.
I started Paradigm Power in 1995, and started conducting my training programs in sales. From then on, in the last 22  years, through Paradigm Trainers Private Limited, I have conducted training, both in India and abroad, for over 1000 companies across various verticals like electrical, electronic, Real Estate. IT, IT Services, etc.  A lot of customers suggested me to write a book. So, the inspiration for this book came from my customers and students!
Target audience?
The book is targeted towards working sales professionals or those who wish to make a career in sales. It is a practical book, unlike the conventional theoretical marketing books which are more suited for the management students.
The book is also for the people who are unable to attend my training programs due to price, time or distance constraints. My book encapsulates about 7 to 8 days of my training programs and covers all aspects of Sales from the negotiation process,  Key Account Management,( KAM)  to collecting outstanding payments. The book is written in a conversational tone, making it easy to read and understand. Due to the pressure salespeople tend to talk a lot than what is needed. After attending my training programs, people have told me they feel more confident, relaxed, and under less pressure to talk all the time. This book also seeks out to inspire that confidence in a salesperson.
contextual-selling
How is it relevant today?
There is a quote which reads “A great salesman is one who can sell a refrigerator to an Eskimo”. Today about 95% of salespeople will agree with this. This kind of approach breeds “con-manship”.
This critical issue of ethical selling is the core foundation of my book.
This attitude of selling anything to anyone was never appropriate all these years.  20-25 years back you could get away with it, since it was a sellers’ market. But today, if you try and sell a product to an Eskimo that he does not want, you will be pilloried all over social media. You and your brand could lose future sales and worse, credibility as well. It is only through creating trust and credibility, that one can succeed in building long-term relationships to create an effective selling environment.
Sales can be a pretty challenging job sometimes..
Well, sales people go through a lot of stress compared to their counterparts in other departments, like programming, shop floor, administration, HR  etc. These people often work from their office premises.
On the other hand, salespeople usually conduct their business in the customer’s space. In the customer’s premises or at the customer’s time (for phone sales). In a way, they are operating from “enemy territory”! Customers are often rude, unsympathetic, disrespectful, and do not even show basic courtesy to sales people.
Sales people are constantly under pressure to achieve targets. Unreachable targets, mostly!
According to you, what are the qualities that make a good salesperson?
The first important quality is effective communication which includes not just talking but paying attention, asking the right questions and knowing when to and when not to speak.  Secondly, one should have a sound product knowledge with clear fundamentals. Thirdly, the ability to take rejection and bounce back is very crucial in becoming a successful salesperson.
Any advice for upcoming salespeople?
These days there is a tremendous opportunity for sales people, yet there is a dearth of good sales people. Nowadays, sales is a very respectable profession. So anyone with the right attitude, and the ambition, one can become very successful.
Thank you, Mr. Rajan, for your time and valuable advice. I am sure all our readers, especially the upcoming salespeople, will benefit immensely from this.
– Hubert J D’Mello

Sales Expert:  
Rajan_passport
Rajan Parulekar – Founder  Paradigm Trainers Pvt Ltd

How Culture affects your Context and Behaviour

A number of readers ask me the significance of the word  Context  in my book  Contextual Selling . Generally speaking American, European c...