Hello, Newspapers: When in doubt, rely on the idea of complementarity.

Several years ago during a business conference, a colleague tossed a simple and very direct question to the CEO. “Considering the growth of digital medium how long newspapers in printed form are going to survive?” he asked. CEO thoughtfully acknowledged the threat and appreciated the concern raised by the colleague and made a prophetic announcement; “yes, newspapers will close down in decades to come but we will be the last to shut shop.” This discussion stayed with me and I often wondered what did the CEO mean when he said- last to close. Most of our concerns about the future of print newspapers are as follows:

  • Fall in readership as millennials are not reading print form of newspapers
  • News consumption on digital platforms has  much faster growth
  • Advertisers are shifting their budgets to digital marketing
  • Online presence of newspapers hardly brings any revenue

Clearly, all players are worried about getting substituted by the digital onslaught and it is reasonable to be concerned. However, let us take a leaf from the industry’s tryst with technology in general. Music consumption was primarily through records and then cassettes and CDs and now in digital format. What did this do to the demand for music? It increased and in different formats including the recent innovation of Carvaan that plays digital music on radio like instrument. When computers came into our lives, papers were to become a thing of the past. Did we get a paper-free office? No, the demand for paper has actually gone up with rising penetration of computers. Therefore, it may not be right to think solely on the basis of substitution. More so in the case of news consumption wherein the exposure to information through multiple platforms could enhance the overall consumer experience. Let me illustrate this with an example: I have been reading The Economic Times, print edition for almost 30 years. For the last 10 years, ET is available on my mobile app and of course as an e-paper on my laptop. My engagement with ET has gone up considerably as the app sets the agenda for my ET reading during the day. At least in my case, I can see the complementarity between ET and ET app and it is working well.  However, ET doesn’t seem to know this for when they launched ET Prime; a subscription-based business content service; it tried to keep the content exclusive to online only.

I have been following a Hindi newspaper and its digital edition and other digital content using the same brand umbrella. This is one of the largest read newspaper and its readers are also consuming content online through newspaper apps and social media handles. The newspaper brand is likely to benefit a lot with more engagement on its online platforms and that engagement could strengthen its relationship with the readers. If a newspaper marketer buys into this principle of complementarity, it would be easier to devise a strategy to operationalize the benefits. For example, consider these:

  • Can the online version of the newspaper be a subscription-based revenue model?
  • Can advertising options be bundled across platforms to measure effectiveness through well-defined metrics?

My argument is for the alignment of print and online versions in a complimentary manner that raises the marketing ROI of advertisers. A wider and deeper engagement with the readers can be achieved through innovative bundling of revenue streams; subscription and advertising included.

Back to my business conference, the question and the answer that we will be the last to close. In that answer, there were two hidden insights; first, it all depends on how do you see the change and second, are you ready to conceptualize and articulate the change in a way that takes into account all the stakeholders and most importantly, the readers. As much as newspapers can uncover the deeper mechanism that is driving this change, they would be better placed to not just survive but thrive in the changing business environment. And, then all players in the market can aim to close last!

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Organizational Capacity Building Through Self-leadership

As part of a research project, the cleaning staff in a hospital were asked about the kind of job they did. The answer revealed an intricate mechanism of job recrafting. They said that they were part of the medical care team because they believed that their job was directly contributing to the patient’s well-being. Researchers could connect this to the phenomenon of natural rewards wherein employees tend to seek and redefine their job in a way that appears naturally rewarding. Most of the salespeople while going through their daily tough grind believe that their job is not to sell but to bring solutions to the customer’s problem. Natural rewards strategy is one of the three components of self-leadership which is essentially a self-influencing process. The other two are thought self-leadership and behavioral self-leadership. Thought self-leadership comprise of several cognitive strategies which include self-talk, mental imagery, and evaluation of dysfunctional beliefs. These cognitive processes help individuals to align their thoughts and focus on the task at hand. The behavioral self-leadership shapes the goal-setting process and build reward contingencies for goal achievement. Within this component are two key aspects of behavior, self-monitoring, and self-punishment, which creates the feedback loop to ensure the discrepancy reduction between the set goal and its achievement. Overall, individuals who practice self-leadership are likely to be super performers and, as the recent research suggests, these performers persist in a turbulent business environment.

Firms have approached employee motivation through two mechanisms; extrinsic and intrinsic. Self-leadership is a cognitive and behavioral motivation that is self-directed. In an increasingly turbulent business environment firms are placing a premium on such self-driven employees. However, at a firm level, self-leadership has the potential to deliver on two critical aspects of modern management; authenticity and a sense of responsibility. An employee with a higher level of self-leadership is guided by a higher-level standard in terms of the required effort, behavior, and alignment with About me

personal values. Such an employee stays committed to the organizational goals and is less likely to trade off self-influence with external influence(for example, from a boss). The other aspect is about the responsibility which relates to the concern for a greater good involving all the stakeholders. When employees take such responsibility they contribute to the strengthening of organizational values such as courage, compassion, and integrity.

Therefore, firms that actively encourage self-leadership processes are likely to have a large number of self-leaders who pursue authentic choices and select responsible behaviors to achieve the end results.

As the society at large expects firms to be responsible in their business operations and be complaint on ethical and legal dimensions, there was no better time to look inwards. Firms could leverage some of their virtues to attract and nurture employees who could drive the culture of authenticity and responsibility in their respective firms. Self-leadership at an individual level has been an amazing driver of performance. More firms need to adopt this self-influence tool as a  baseline employee resource which if deployed well, could put the firms on a path of higher purpose.

Declining Car Sales : An Evolutionary Motives Perspective

The Finance minister recently attributed the decline in car sales to increased preference and usage of cabs such as uber and ola among the Millenials. The trolls got busy to the extent of ridiculing the statement, a reflection of social mob behavior. This was followed by a remark of Mr.R.C.Bhargava, an automotive expert, which suggested that cars have become very expensive hence lesser buyers. Uday Kotak further added that cars as possession are no longer a status symbol for the youngsters hence it is cool to use cabs rather than buy a car. There could be many more viewpoints on this which are not accounted here in this post. However, we need to uncover this complex phenomenon by answering a simple question; why do people buy a car? what are the fundamental motives that drive the buying decision?

Marketing literature organizes the fundamental motives in seven categories; self-protection, disease avoidance, affiliation, status, mate acquisition, mate retention, and kin care. As one would note, these motives very well capture the evolutionary needs of the human being. In the context of car buying decisions, the most important driver could be a strong need for safety, affiliation, and status. Safety needs are manifested in different behavioral tendencies that include increased aversion to loss and decreased risk-taking. Now consider the consumer sentiments from the end of last year to this year September. Largely it was believed that post-elections, the country’s economy will grow faster and that would bring more stability in jobs and income. Clearly, with no such signs in sight, the sentiments took a dip and the safety motive got triggered. Therefore, less number of the first-time buyer and even lesser number of upgrade buyers. Next, consider the changing spending preferences among the Millenials ; it is a well documented trend that they tend to spend on experiences and less on material possession. That explains the need for affiliation to be there on vacations, eating out and indulging in adventure sports rather than spending money on buying cars.( Just consider the way affiliation need can be fulfilled by being on Instagram or facebook with experience content!) The need for status still remains strong but the choice of possession to display status has moved to soft acquisitions and cars have lost their preferred position on the list.

Therefore, Nirmala Sitharaman, R C Bhargava and Uday Kotak are all right in their assessment of the slowdown trend in the automobile business. Most of us believe that economic slowdown is cyclical and recovery is around the corner. However, the auto marketers must pick up the right levers to accelerate demand by devising ways to trigger two keys motives: mate acquisition, mate retention and kin care ; and position the idea of possessing a car in a novel manner.

 

Managing Knowledge and Ignorance: A Case for Executive Education

“The more you know, the more you do not know,” writes Shriniv Narayan in The Speaking Tree, a daily column in The Times of India. He argues that the observable universe is about 46 billion light-years in radius and there is an unobservable universe that the scientists are unable to fathom yet. Consider this; if that be the state of our knowledge and ignorance about the universe, what would be like our status in terms of our knowledge and ignorance in the world of business that is evolving at a faster pace. It is just not possible to say that your knowledge expedition is over, for newer developments keep reminding us; you have a long way to go. Specifically, in an Executive’s life, the rule is rather simple; one always remains a work in progress! Therefore, the imperatives of self-growth and self-management are rooted in the idea of new knowledge acquisition and the surest way to succeed here is to build commitment for your development goals. Formal and structured learning is a great way to build such a commitment. Clearly, there are many advantages that accrue for business executives when they sign up for such executive education programs:

  1. Growth Mindset: Sure enough, a growth mindset is about the company’s growth in the market place. But that is just half the story. If a company has to grow, its employees must deploy this mindset at the individual level as well and more specifically, in the way they see themselves as significant partners of the growth story. Executives signing up for executive education programs send a clear signal to their employers that they are committed to learn more and contribute more. Is not that what companies are looking for? It is a win-win for both; the employees and the employers.
  2. A Shift in Perspective: Executives enrolled in an education program develop a wider perspective on their business problems. At their work, they mostly rely on the knowledge bank developed within the company based on its own and or it’s competitors successes and failures. In an executive education program, the participants are encouraged to take a ringside view of the problems and build multiple perspectives on a given situation. In the movie Dead Poets Society, Keating (Played by Robin Williams) said, (https://youtu.be/U91Wl2YpkD8)

    “Just when you think you know something, you have to look at in another way. Even though it may seem silly or wrong, you must try.”

    Clearly, an immediate consequence of good learning from a program is about developing new perspectives embedded in multiple paradigms of business. To illustrate the point, let me cite an example from my own learnings. At an executive education program when I was confronted with a business growth challenge, I was focussing on just one stakeholder; the customer. During the discussion in the classroom, I could build another perspective that included competitors- how to include them in our strategy to build topline growth?

  3. Recast Knowledge in Emerging Realities: Often, the ignorance is not about lack of knowledge but more about the fit with the new realities of business. Lets us take a very simple example to illustrate this point. Most of the Sales Managers are aware of “how to motivate your salesforce” formula and they feel very strongly about their own way of managing a sales force. Most of it is grounded in the expectancy theory that is fundamentally built on reward expectancy. However, if you are having a good number of salespeople from the millennial generation, you would want to ask; are my older views about motivation hold true? Possibly not. Maybe this generation of employees are more independent and they would perform best with least supervision. The emerging paradigm of self-leadership would help the sales managers understand that intrinsic motivation is a more powerful source of the ‘drive’ and all they need to do is to craft a ‘purpose’ for their sales force. Think of several such issues in operations, marketing, and HR; your knowledge of these domains need a recast into the new tech-driven realities of the business.
  4. The Network Learning: A good executive program helps in widening your network; you include more actors in your sphere of influence. Participant from other companies, industry and faculty members for the program, they all potentially become part of your network. The peer learning here is cross-functional and multi-disciplinary and therefore, you become more welcoming of new ideas and possibilities.
  5. Self-Discovery: As you start your learning in a structured curriculum based environment, you also get a sense of what are your natural strengths and weaknesses. Such a high level of awareness results in self-discovery not only in terms of your career choices but also aids in shaping newer options; for example – it is not uncommon for executives to discover their entrepreneurial streak during an executive program.

Therefore, when a business executive is evaluating the options of whether to enroll or not to enroll in an education program, it is worthwhile to consider the truth; that we are all work in progress. The more we invest now, in terms of available resources, our quest for managing the balance of knowledge and ignorance would grow stronger. That very quest is what successful managers are made of, and organizations who hire such managers reap long term dividends.

 

 

 

 

 

Trust erosion as an outcome of a celebrity’s endorsement of a ‘failed’ brand: Is there a recovery mechanism?

Recently, star cricketer Mahindra Singh Dhoni filed a plea at SC claiming about 48 crores of unpaid dues from Amrapali group. The group is facing a fraud charge and the case is with SC. The buyers who invested in the residential projects promoted by the group fought a long battle to ensure that the Supreme court of India intervenes and help them get their property and or refund from the company. The Amrapali buyers are raising a point: till the time the Amrapali group was engaged in a legal battle with its customers, Dhoni did not say a word. Now, for his own money, he is knocking at the door of SC. Customers consider this behavior as a breach of trust because customers bought the property with an idea that the project is not only endorsed by Dhoni, he himself owned a penthouse there. Several customers took to media saying that Dhoni should have stood by them to help them get their flats or money refunded rather than just fighting for his own endorsement money.

This raises two key issues; the first one relates to the moral responsibility of a celebrity who endorses a product or service (in this case, it is a very high value and high involvement purchase) and the firm gets entangled into financial fraud, and, the second one is about the post hoc impact of such fraud on the celebrity brand value. The key question here is; is there a trust recovery mechanism?

Endorsements and moral responsibility

Celebrity endorsements have several risks for the brands such as eclipsing of the brand itself by the celebrity’s powerful brand image. The reverse of that is also true “when the brand does something deemed unacceptable by consumers, the celebrity can also be seen in this light. This could cause followers of the celebrity to be doubtful of them, not just the brand. Assumptions could be made that the celebrity agrees with all actions of the brand and become less credible by association”. (https://en.wikipedia.org/wiki/Celebrity_branding#cite_note-:13-54)

Clearly, in the case of Amrapali, the buyers believed in the endorsements made by cricketer Dhoni and now they feel let down by him. There is a clear case of a wrong moral judgment that kept Dhoni silent on the whole issue of project delays. The buyers created their own self-help group and took help of the regulators to seek justice from the highest court in the country. No word from the celebrity who urged on the potential buyers to trust Amrapali brand because he believed it to be trustworthy.

A mechanism to recover trust

Dhoni did break his silence but only to claim his endorsement fees from his client, Amrapali Builders. This move was certainly ill-advised. A futile attempt to tell the customers; look I am also a victim of this fraud! That is a very meek way of handling the issue of trust erosion. Any celebrity in a situation like this should not only be seen and heard as being empathetic towards the customers but they could also seize the opportunity to engage into customer advocacy for safeguarding customer interests from such firms. A potent mechanism, therefore, is to engage directly with the factors that led to the m-s-dhoni-1460730892loss of trust and amplify the intent to work on those factors. This could help in regaining trust and strengthening the celebrity brand with more power and credibility.

 

Managing Your Sales Funnel: The Sales Manager-Salesperson Dyadic Perspective

In recent years, the importance of sales funnel management in brick and mortar, online business and hybrid business models is increasingly driven by the advances in CRM capabilities of the firms. Newer models to manage the funnel, newer analytics to power its efficiency and stronger emphasis especially on web-based business models have added multiple layers of complexities and many of these layers, in my opinion, are unwanted. In the next few paragraphs, I am making an attempt to delineate the fundamentals of sales funnel management (SFM, hereafter) and offer a perspective from Sales Manager-Salesperson dyadic relationship; the start and end point of action!
Let’s begin with this question: Why do customers buy our products? The answer to this question is largely dependent on our understanding of the buying funnel that starts with customer awareness, moves to brand awareness, brand consideration, brand preference, purchase intention, purchase, customer loyalty and finally, customer advocacy.(Source: Ending the War Between Sales and Marketing, HBR)

The buying funnel suggests that once the brand preference is built and the customer expresses his/her interest (in varying degrees, of course), the sales lead flows into the sales funnel. From this point on, the lead must be qualified, approached, and converted to a sale thereby sales lead turning into a customer. The sales lead that flow into the selling system could come from the marketing efforts and from the salesperson’s on ground activities including social selling efforts.

The sales force needs to perform different actions at each of the five stages of the sales funnel.
1. Lead generation: Expand the leads basket through activities, social selling
2. Lead qualification: Deep dive and develop intimacy with leads as follow-ups are pursued
3. Selling: Deploy the appropriate selling method to ensure the right value for the customer
4. Close: Conclude the sale and close the order
5. Service: Provide post-sale service to the customer
Clearly, the sales funnel throws up multiple sets of challenging tasks and responsibilities that must be managed and desired efficiency levels are achieved from stage 1, the starting point of the funnel. The leads that flow into the funnel must be treated with utmost care and the sales manager must ensure the following:
• The leads are adequate in numbers
• These are scanned for accuracy
• A great deal of intimacy is developed with the leads – what are the sources of leads? Inbound marketing? Referrals?
• Leads are approached with a sense of immediacy
The issue of immediacy requires complete attention and monitoring of the sales manager. Recent research has suggested that the biggest leakage in the funnel takes place due to a delayed response to a lead. Consider this: 1.25 million online leads were tracked and it was discovered that leads followed up within an hour had seven times better chances of qualifying as compared to leads followed after an hour. The chances were 60 times better as compared with leads followed up post 24 hours. Therefore, it is critical that sales leads are acted upon immediately and this is possible only if the sales manager-salesperson dyad is functional and efficiently managed.

Leads to Conversion: The Essentials for Sales Managers

The conversion rate in a sales funnel is a function of salesperson’s effort and attention and the supervision support that the sales manager must provide to his/her team. Responding to sales leads immediately is great but often persistence is missing which leads to early losses. Consider these facts:
• 48% of salespeople quit after the first contact
• 90% quit after the fourth attempt
• The remaining 10% are persistent with their sales leads and they find this rewarding; because 80% of the sales are closed after the fifth contact! These salespeople, therefore, are super productive.
Sales Managers must have a collaborative approach towards sales funnel management and should back it up with solid data analysis. They should monitor the leaks and delays at each stage of the funnel and understand the causes of success and failures. Few useful strategies are as under:
1. Don’t keep your prospects waiting: Get close to them immediately
2. All leads are not the same and they require the different intensity of approach and follow-ups: For example, the source of lead could be an indicator of the position of prospect in the buying process. A lead coming in the form of inquiry from a website (in case of cars, if it is coming from Cardekho.com) could suggest that the prospect is close to firm up his purchase intention. On the other hand, a lead coming from a paid advertisement, referrals could be from prospects at an early stage of the buying process.
3. Allocate leads wisely: Sales managers must use different filters while distributing leads amongst the team members. Some of these could be; skills, demography, salesperson’s expertise.
4. Patiently aggressive: Be aggressive with leads but do not give up easily. Persistence is the key and therefore timely feedback in the dyadic relationship with your salesperson will help a great deal. Make your salesperson realize that even the so-called “bad leads” are hidden opportunities waiting to be harvested, provided meaningful connections are maintained.
5. Learn like a Machine: Measure the success and failure at each stage of the funnel. Learn from the events leading to such developments. Develop strategies to avoid failures and ramp up success rates.
6. Salesperson as a unit of analysis: Aggregate analysis is good; the better strategy is to examine individual salesperson’s funnel performance. This could throw insights that can be useful in improving sales funnel performance on an aggregate basis.

Sales Managers would benefit a lot from understanding the linkages of salesperson’s motivation, opportunity, and ability that drives the efficiency of the sales funnel. Clearly, managers who excel in sales planning and manage sales force motivation are the winners in the crucial sales warfare; sales funnel management.

Wear the badge of a Salesperson with pride

Last few days of 2017 and first few days of 2018 gave me few memorable experiences; sweet and sour. Let’s get over with the sour thing first. I was booked on a Indigo flight on 31st Dec and I was looking forward to being with my family in Delhi, however owing to bad weather the flight was cancelled. A short and crisp message from the airline left me stranded there. But that was not the service failure (we understand bad weather), the failure was that in such situation the service provider did not care for its customers – a call to the customer would have helped. My ticket was booked through premiermiles, a Citibank outfit and they did not even bother to send me a SMS (as per their record, I did travel on the flight which never took off!) A classic and not so pleasant example of a service operations failure. With so much of technology at their command!

Let’s get to the sweet experience. On Jan 2, I walked into a store of Himalaya Opticals and met a very helpful salesperson. While helping me in selecting a good frame he quickly realized that I was closing in on my choice. However, he also sensed that I was not very happy with my selection. Looking at my decision dilemma, he suggested that I postpone my purchase for three days as they were expecting more stock in the store and I will surely get what I was looking for. He was a smart salesperson who could have easily sold something to me that day itself. He chose not to do so but invited me to a later date. That set me thinking; why do good salespeople bet on their customers? How do they offset their risks and tradeoff short-term gains for long-term relationships with customers? To understand these questions, we need to consider the evolution journey for this profession called ‘Sales’.

Powers et al.(1987) published an interesting article chronicling the profession of selling before 1900. This paper provides a detailed review of how the profession evolved through different ages in the history. Here are some of the key points:

1. The Ancient World: Selling as an economic activity started with the idea of shortages and surpluses in the agriculture produce. The ‘Peddler’ was the first salesperson which did primarily two jobs; selling and holding the inventory. The salesperson would go house to house to sell their wares driven by the entrepreneurial spirit.

2. The Classical World: After the Greeks developed coinage system and formed commercial regulations, the markets got a structure: clusters of sellers in one place competing for customer’s business. The era saw the emergence of ‘Merchant Salesman” and Women Salesperson (Pea Soup Woman!).

3. The Dark Ages: It was during this period that Islamic traders started developing the profession and selling became a primary source of economic growth. A salesperson/merchant was considered a contributing member of the society.

4. The Middle Ages: Selling evolved as a career choice and people took this option for quick success. However, it was also realized that a career of the travelling salesman was not a pious existence.

5. The Renaissance: The salesman assumed different roles; auctioneer, trader, lecturer and even entertainer. He was considered wise and powerful people invested in his wisdom to increase their own treasuries. During this period of commercial re-awakening, merchant markets and fairs provided a fertile ground for the selling profession to grow further.

6. The Modern Age: Beginning of 18th century, a retail system started forming and technological inventions were taking shape. To complement these developments, advancement on sales practices was an important driver. Josiah Wedgewood, a Potter, can be considered one of the leading businessman in that era who implemented the idea of market expansion and coverage and served his markets by getting his ‘salesmen out on the road’. His use of company salesmen to execute his marketing plan including creative promotion was remarkable. He first coined this idea that distribution would be best serviced by the captive agents of the firm. Also, development in transportation and communication technology helped in realizing the idea of a fully integrated sales force. These developments in transportation and communication made salespeople more efficient.

Therefore, the evolution of sales profession provided a solid foundation for the development of the marketing paradigms in the 20th century. It is important to understand the linkage of marketing thought development and further evolution of sales profession in 20th century and beyond. Let’s take a closer look.
1. The Transactional Paradigm: Selling continued to be dominated by the idea of a transaction; a seller and a buyer and hence the exchange. A large part of 20th century, a salesperson job continued to be a ‘peddler’; to sell and manage inventory. Yes, the sales organizations crafted the selling job in a way that required salespeople to manage customer demand through a distribution channel network. In industrial selling, salespeople mostly handled customer enquiries, gave a demonstration and collect the order. (Many organizations did not have a sales function; they called it commercial department)

2. The Relationship Paradigm: By the end of 20th century, marketing scholars started building the concept of relationship marketing and that had a major impact on the way companies would look at their salespeople. A big change that took place was in terms of the value of a salesperson. Since customer relationships became the key driver for sales growth, salespeople were on the front of relationship building efforts. Again, a technological advancement in term of computing software made the idea of CRM operationally efficient. Now, salespeople were much more informed about their customer and they could customize their selling strategy to be more effective. Salesforce effectiveness became the buzz word.

3. The Value Paradigm: As we entered the 21st century, marketers emphasized that the sustainable relationship with customers is possible only if we understand customer value and deliver it to them. This had huge positive implications for the profession of selling. (a) Salespeople started appreciating the idea of customer value creation and that made them customer oriented. They started following the customers’ benefit schema and designed their sales pitch accordingly. (b) A salesperson was no longer responding to customer requirements, she was actively participating in helping the customer understand and articulate the requirements. The salesperson started doing so with the help of relevant knowledge delivery. (c) The notion of a salesperson as a ‘Value Merchant’ started gathering more strength, as more and more companies treated their salespeople as ‘knowledge brokers’ to get more customer insights that would help them to design market offerings. (d) This brought more prestige, accountability and integrity in a salesperson’s job. (I wish to exclude exceptions to unethical practices by few companies. Salespeople did not fail, sales strategy did!)

With this understanding of the evolution of a salesperson’s profession, I go back to my experience with the salesperson I met at Himalaya opticals. As a salesperson, he was taking full responsibility for the value that I was looking for. With his experience, he could make out that I was looking for something that was comfortable to wear and he must have noted that I was not looking at the MRP. Therefore, he possibly and rightly so took me as someone who could pay a higher price for a better frame. Hence the advice: come back on Friday, we are getting fresh stock. And to ensure that I come back, he said with confidence: “You will get what you are looking for and I will work out the best deal for you”. Am I going back to the store? You bet!