Posts Tagged ‘ Management ’

Do you need a reference list of #Twitter #Hastags for #Mfg?

As more and more people join Twitter and other social media outlets they are finding a rather steep learning curve for all of the nomenclature used.  This is particularly true with regard to #Hashtags.

Short messages on services such as Twitter or may be tagged by including one or more hash tags: words or phrases prefixed with a hash symbol (#), with multiple words concatenated… These hash tags also show up in a number of trending topicswebsites, including Twitter’s own front page. One phenomenon specific to the Twitter ecosystem are micro-memes, which are emergent topics for which a hash tag is created, used widely for a few days, then disappears. – Wikipedia

Again, with the massive influx of people from the manufacturing sector entering Twitter, it’s become very hard to search for or decide what the various common hashtags mean. But never fear, there’s an app for that! Well, sort of, it’s actually a website called TagDef.  Short of going there, you can check out the following is a list of commonly used hastags in the twitterverse and, in particular, the manufacturing & metalcutting industry.

Common #hashtags:

#Aero – Topics related to the aerospace & defense industry

#Aerospace – Typically the term is used to refer to the industry that researches, designs, manufactures, operates, and maintains vehicles moving through air and space. Aerospace is a very diverse field, with a multitude of commercial, industrial and military applications. This hashtag covers a great many topics. Please see the above hashtag “#aero” which appears to be more manufacturing industry specific.

#AMT – refers to Alternative Minimum Tax which has the most volume.  Although it has been used for The Association For Manufacturing Technology the larger population already on Twitter uses the first definition. Organizations should select Hastags and post their definitions sooner rather than later.

#AMTDA – American Machine Tool Distributors’ Association is a Trade Association dedicated to lead distributors of manufacturing technology. Found at and

#AutoMfg – Topics related to the automotive industry as it pertains to design & manufacture of automotive components.
Defined by the following NAICS codes:

  • 336111 Automobile Manufacturing
  • 336112 Light Truck and Utility Vehicle Mfg
  • 336120 Heavy Duty Truck Manufacturing
  • 336211 Motor Vehicle Body Manufacturing
  • 336212 Truck Trailer Manufacturing
  • 336213 Motor Home Manufacturing
  • 336214 Travel Trailer and Camper Manufacturing
  • 336311 Carburetor, Piston, Piston Ring, and Valve
  • 336312 Gasoline Engine and Engine Parts Mfg
  • 336321 Vehicular Lighting Equipment Mfg
  • 336322 Other Motor Vehicle Electrical and Electronic Equipment Manufacturing
  • 336330 Motor Vehicle Steering and Suspension Components (except Spring) Manufacturing
  • 336340 Motor Vehicle Brake System Mfg336350 Motor Vehicle Transmission &Power Train
  • 336360 Motor Vehicle Seating and Interior Trim
  • 336370 Motor Vehicle Metal Stamping
  • 336391 Motor Vehicle Air-Conditioning Mfg
  • 336399 All Other Motor Vehicle Parts Mfg

#cadcam – Topics related to CAD/CAM: Computer-Aided Design and Computer-Aided Manufacturing. Often associated with Computer-Aided technologies #CAx, Product Lifecycle Management #PLM

#CMTS – Although it does not appear as a hashtag per se, as it often appears in the form #CMTs as an alternative version of #CMT for what appears to be Country Music Television. It does not refer to Canadian Manufacturing Technology Show although, as that show gets closer, the folks  @SocMfgEng should select an appropriate hashtag

#CNC – Computer Numerical Controlled (CNC) machine tools. CNC-like systems are now used for any process that can be described as a series of movements and operations. These include laser cutting, welding, friction stir welding, ultrasonic welding, flame and plasma cutting, bending, spinning, pinning, gluing, fabric cutting, sewing, tape and fiber placement, routing, picking and placing (PnP), and sawing.

#CTD – Cutting Tool Distributor.

#defense – There is no definition for this category as it encompasses topics from defense in football, defense (#military) policy and economics.  For topics related to defense manufacturing please see the above hashtag #aero

#DOD – Tweets regarding the U.S. Department of Defense carry this tag. This tag is used by various gamers as well

#ERP – Topics about Enterprise Resource Planning, a system that is used to manage and coordinate all the resources, information, and functions of a business

#FB – This tag is used by people who have installed the Selective Twitter Update application on Facebook. Tweets ending in #fb are automatically imported to Facebook, all others are ignored. Just a note, if #fb appears anywhere other than at the end of the tweet, it will not sync with Facebook.

#FF – #ff is the same as (short for) #followfriday: Every friday you can use #followfriday (#FF) to suggest people to follow.

#green – Tweets related to sustainable and environmentally friendly ways of living.

#IMTS – International Manufacturing Technology Show found at

#inshoring = “#reshoring” and “#inshoring” may be thought of as the ‘opposite’ of Offshoring. It is the business process outsourcing work domestically within a given country

#ISO – Refers to the International Organization for Standardization

#ISO-P – An #ISO category that includes carbide cutting tools best suited for machining a variety of #steels.

#ISO-M – An #ISO category that includes carbide cutting tools best suited for machining ductile irons, harder steels, stainless steels, and high-temperature alloys.

#ISO-K – An #ISO category that includes carbide cutting tools best suited for machining cast irons.

#ISO-N – An #ISO category that includes carbide cutting tools best suited for machining a variety of Aluminum wrought and Aluminum cast alloys, copper, copper alloys, non metal materials

#ISO-S – An #ISO category that includes carbide cutting tools best suited for machining a variety heat-resistant alloys like Nickel/Cobalt-base alloys & Titanium alloys

#ISO-H – An #ISO category that includes carbide cutting tools best suited for machining a variety Hard materials such as Hardened steels (>35-45 HRC), chilled castings, hard cast irons

#JIMTOF – Topics related to the Japan International Machine Tool Fair. More details at

#JobShop – Topics that relate to Job shops which are typically small manufacturing businesses that handle job production, that is, custom/bespoke or semi-custom/bespoke manufacturing processes such as small to medium-size customer orders or batch jobs.

#Lathe – Topics related to lathe: a machine tool which spins the workpiece to perform various operations such as cutting, sanding, knurling, drilling, or deformation with tools that are applied to the workpiece to create an object which has symmetry about an axis of rotation.Lathes are used in woodturning, metalworking, metal spinning, and glassworking.

#Lean – Noun: the name given to the philosophy of delivering maximum value to stakeholders with the least possible waste. Predominantly associated with the Toyota Production System and Toyota Product Development System, derived from the works of Taiichi Ohno and Shigeo Shingo amongst others.

#Logistics – Logistics topics are about the management of the flow of the goods, information and other resources in a repair cycle between the point of origin and the point of consumption in order to meet the requirements of customers

#Materials – Topics related to Materials: anything made of matter, constituted of one or more substances. Metal, Wood, cement, etc. Sometimes the term “material” is used more narrowly to refer to substances or components with certain physical properties that are used as inputs to production or manufacturing.

#materialhandling – Topics in Material Handling are about the movement, storage, control and protection of materials, goods and products throughout the process of manufacturing, distribution, consumption and disposal

#medicaldevice – A medical device is a product which is used for medical purposes in patients, in diagnosis, therapy or surgery.

#Milling – Topics related to milling machines, CNC milling, cutting tools, milling problems, milling products, End Mills, Face Mill, Shell Mills. etc

#Metalcutting – Topics related to the metalcutting manufacturing industry using lathes and mills in the production of components in SIC 33-39, NAICS 31-33

#Metrology – Topics related to the science of measurement.

#MFG – “MFG” is used to reference topics that relate to global manufacturing and the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale. Be aware that an alternative definition is posted from the folks at #NAM (see below)

#Moldmaking – Topics related to moldmaking: Anyone who produces molds for the injection molding (plastics), die casting (e.g. aluminium, magnesium) and ceramics industries.

#MTD – Machine Tool Dealer

#NAM – The NAM – Advocacy for U.S. Manufacturing. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers create jobs and growth, visit  Be aware that the more common usage of the hashtag “#NAM” is by Viet Nam veterans and National Adoption Month.

#Plastics – Topics related to plastic materials is any of a wide range of synthetic or semi-synthetic organic solids used in the manufacture of industrial products

#reshoring – “#reshoring” and “#inshoring” may be thought of as the ‘opposite’ of Offshoring. It is the business process outsourcing work domestically within a given country

#SocialMedia – Social Media is an emerging form of news and information distribution that may soon replace traditional media like newspapers, magazines, tv and radio

#SM – Social Media

#SMD – Social Media Design

#SMI – Social Media Implementation

#SMM – Social Media Monitoring

#SMO – Social Media Optimization

#SMT – Social Media Training

#STEM – Refers to topics related to he acronym S.T.E.M. which stands for science, technology, engineering, and mathematics education.In many forums (including political/governmental and academic) the strength of the STEM workforce is viewed as an indicator of a nation’s ability to sustain itself.

#subtweet – It’s the shortening of “subliminal tweet” which is directly referring to a particular person without mentioning their name or directly mentioning them and it basically indicates that the tweet in which the hashtag is used is a subliminal tweet.

#sustainability – is in use by several different interest groups. Use at your own risk as it relates to manufacturing.

#USMTC – United States Manufacturing Technology Consumption found at Manufacturing Technology Market DataTimely, Comprehensive, ConfidentialAvailable to Builders and Distributors180 Manufacturing Technology Product CategoriesNational and State Time Series Orders DataGeographic Sales Territory Orders DataMachine Orders by End User Industry

#workforce – Topics related to the workforce: The labour pool in employment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic region like a city, country, state, etc

#Workholding – Broad category of Topics related to workholding and fixturing in lathes & mills in the production of components in SIC 33-39; NIACS 31-33.

#WW – is either Worth Watching, Writing Wednesday, Wine Wednesday or Wedding Wednesday depending upon the context used.  A rather good example of why researching hastags is important in your business, organization or event.

#xmas (#cmas) – short for Christmas

For more definitions on hashtags be sure to visit TagDef

If you know of more hashtags that should be on the list be sure to leave a comment below and I’ll add them.

If you want to learn more about Social Media marketing in the industrial sector please contact us at:

Rapid Production Marketing

tel: 412.996.5700

Who leads the charge in Social Media? Marketing, PR, Sales, Customer Service?

Who leads the charge in Social Media? Marketing, PR, Sales, Customer Service?

Customer Service, Sales & Marketing; Who leads?

Social Media is a ‘new’ way to sell.  Selling is, after all, about relationships. People do business with people that they “like” and merely having a website, literature, advertising,etc. isn’t going to generate revenue.
What Social Media is doing is creating a new paradigm.  I know that that sounds cliché. But I believe that it’s creating a new “type” of business.  Traditional marketing adapted, very successfully in the 1980’s thru 1990’s, to creating websites after they had experience in graphics, advert buys, copywriting and literature development. It was a natural evolution.

However, Social Media has created an environment where front line sales and front line customer service people are directly affected.  Frankly, the people who tend to “get it” are the folks in the sales and CRM areas: It makes sense to them. It’s about one-on-one relationships. It’s what they already do.

I’ve spoken to a great deal of sales people who have expressed concerns about their “marketing” departments not “getting it”  Not that that “disconnect” is a new phenomenon, but now they are seeing how it can directly affect their income…. and they want more control so they can make more money, have better relationships and  sell more.

I read an article over twenty years ago that said “Small companies spend years trying to become big companies and big companies are constantly trying to figure out ways to become as responsive, nimble, and aggressive as small companies.”  The reality is that the people who are the best salespeople don’t always make the best managers and the best managers are not generally the best salespeople (Yes, there are always exceptions.)

As companies get bigger they create marketing, customer service and sales departments. Marketing management consults sales management and, in good faith, creates tools for the field.  Sometimes they get it right. Sometimes they don’t.  Sometimes sales management doesn’t always “get what the sales people need. In the new Social Media paradigm, marketing will work more closely with sales and customer service.  Marketing will create the tools and sales and customer service will USE them with and insight role for marketing.  Note, I said “insight” and not “oversight”. That loss of control could take some getting used to, but THAT is what is going to drive ROI.

So, I suspect we are going to see a “blending” of sales PR, CRM and marketing functions.  I also think we are going to see new leaders sprout up within this new paradigm. Their backgrounds could be in marketing, customer service and/or sales.  Social Media converges these traditionally separated business units and skill sets.

I have spoken to a number of traditional marketing people who have approached me to ask a variety of questions about social media.  More often than not I find that there is a certain level of discomfort: “I don’t know these products” “I don’t know these services in that level of detail”  In fact, I sat in on a marketing webinar recently and listened to the moderator say “We’re getting a lot of comments about how people are uncomfortable talking about budgets and ROI. If you’re not comfortable talking about budgets you should take a sales class, we can’t help you with that”  The marketing folks that “get” selling and understand that something has to be sold in this new paradigm will be successful.

Certainly delivering “analytics” is valuable but when it comes down to the brass tacks someone has to sell something and there has to be a demonstrated ROI for social media. You can’t just come in, build it, create graphics and say “Here’s how you measure it”.  You have to “DO IT” and/or

…. you have to train.  Unlike traditional marketing that would create a website and great landing pages, now marketing has to either become much more intimate with the products or services, they have to know how to “sell,” or they need to know how to “train” people how to use the new sales tools… and it is my belief that THAT is what Social Media tools are: Sales Tools.  Marketing need not learn the product or service nuances, they need to teach the right people how to use them…

man’s got to know his limitations Lieutenant Briggs

As a result of Social Media I think we will see marketing, sales, and customer service arrive in the space together, each bringing a “piece” of what they are good at to create something new. I think the tool has finally arrived that can make everyone more responsive, nimble, and aggressive. Now the trick is to get the tools in the right hands and the right leadership in place.


Successful implementation of Social Media tools gets everyone working together in the engagement


As always, your comments and feedback are greatly appreciated.  If you would like to discuss this in more detail feel free to contact us at our website: Rapid Production Marketing

Image 1 from: Battalion Wars n-Europe

Image 2 from: Battalion Wars Gamespy

Battalion Wars is an integrated battle strategy game… You might be surprised what your kids are learning from “gaming”


UPDATE: March 7, 2011

Here’s a link to several articles on the same subject:

Social Media’s Little Image Problem (or how to work for fame and glory)

A Day in the Life of Your Friendly Community Manager

The Hectic Schedule of a Social Media Manager




How well do you know your competitors? Do you have the right product mix?

“So it is said that if you know your enemies and know yourself, you can win a hundred battles without a single loss.
If you only know yourself, but not your opponent, you may win or may lose.
If you know neither yourself nor your enemy, you will always endanger yourself.”
– Sun Tzu

Several years ago all the rage in business books was Sun Tzu’s “The Art of Warfare”

Many read the 18 chapter of the book but few actually delved into a thorough analysis, or, more appropriately knew how to begin an analysis. So let’s talk about several methodologies.

Line-of-Business Analysis

Porter's 5 Forces

In 1979 Michael E. Porter of the Harvard Business School developed a framework for the industry analysis and business strategy development called the “The Five Forces”:
1. The threat of substitute products or services
2. The threat of the entry of new competitors
3. The intensity of competitive rivalry
4. The bargaining power of customers (buyers)
5. The bargaining power of suppliers

Without going into great detail and describing the “marketingspeak b-school” lingo, here’s what it boils down to:
1. What products do you make?
2. Whom do you compete with?
3. How well do you know your competitors?
4. Where is your product positioned relative to them?
5. How do you beat them?

Now, let’s dive into some detail. You manufacture a variety of products that compete with other companies. Let’s pretend that you are an end mill manufacturer.

You make carbide end mills as a primary product and you have an offering of carbide burrs. Is this burrs product group going to be competitive?

My Competitive Burr Manufacturers

Here’s the product you make:

  1. A Style –  Cylinder Flat
  2. C Style – Cylinder Radius
  3. D Style – Cone Pointed
  4. E Style – Cone Radius

Who are your competitors in EACH category?

  • List them all. The first step is to understand who your competitors are.
  • List everyone you can think of and then ask other people within your company, your agents, and your distributors to add to the list. Get the list together.  Remember YOU will not know everyone and you might be surprised what comes out of the woodwork.
  • Break down your competitors by the product categories (in this case, the above 4 listed: A, C, D, E style burrs)
  • Do a SWOT analysis on each category.
  • Now, what else to those competitors make? Do you have the same solutions that they have?

What you might start with may look like something pictured here on the right.

Now if your primary product is making end mills and you “dabble” in making burrs how are you going to compete with someone who makes all of the following:

  1. A Style –  Cylinder Flat
  2. B Style – Ball
  3. C Style – Cylinder Radius
  4. D Style – Cone Pointed
  5. E Style – Cone Radius
  6. F Style – Tree Radius
  7. G Style – Cone Inverted
  8. I Style – Oval/Egg
  9. J Style – Flame
  10. K Style – Flame Large
  11. L Style – Tree Pointed

If you are using a distribution channel, the distributors are going to take the path of least resistance no matter what you do.  You may have a distributor owner telling you “We like you and we want to promote ALL of your products” but in reality, when an inside salesperson get an order from a customer  with A, C, D, E, F and G burrs on his purchase order it’s just easier to place that order with ONE vendor instead of two (and split the order) regardless of what the boss says.

So you’ll have some decisions to make: Do you expand the offering so it is more complete?  Do you just keep the offering where it is at right now and accept the fact that you will lose certain orders at certain distributors within your channel?

At the outset you might not know.  But, that’s not important.  What’s important is that you MAKE A PLAN.  Then take the plan to the field.  See what feedback you get and ADJUST TO MEET THE MARKET NEEDS.

Line of Business Analysis

There’s a great company that does Line-of-Business analysis for you.  It might be worth a few minutes of your time to take a look at their website. They’re called : eCompetitors: Global Industry Dashboard


There are two very good concepts you should understand in your planning process.  OODA Loops and PDCA.  I’ll take a minute and explain the basics:


Observe, Orient, Decide, Act is a concept originally applied to the combat operations process, often at the strategic level in military operations. It is now also often applied to understand commercial operations and learning processes. The concept was developed by USAF  Colonel John Boyd.  In the fast paced world of business competition it’s a good idea to understand how fighter pilots are trained.

Boyd developed the OODA loop concept to explain how to direct one’s energies to defeat an adversary and survive. Boyd emphasized that “the loop” is actually a set of interacting loops that are to be kept in continuous operation during combat. He also indicated that the phase of the battle has an important bearing on the ideal allocation of one’s energies.  Basicially it comes down to this:

When the enemy aircraft comes into radar contact, more direct information about the speed, size, and maneuverability, of the enemy plane becomes available; unfolding circumstances take priority over radio chatter. A first decision is made based on the available information so far: the pilot decides to “get into the sun” above his opponent, and actsby applying control inputs to climb. Back to observation: is the attacker reacting to the change of altitude? Then to orient: is the enemy reacting characteristically, or perhaps acting like a noncombatant? Is his plane exhibiting better-than-expected performance?


Plan, Do, Check, Act is an iterative four-step problem-solving process typically used in business process improvement. It is also known as the Deming cycle

  • PLAN – Establish the objectives and processes necessary to deliver results in accordance with the expected output. By making the expected output the focus, it differs from other techniques in that the completeness and accuracy of the specification is also part of the improvement.
  • DO – Implement the new processes. Often on a small scale if possible.
  • CHECK – Measure the new processes and compare the results against the expected results to ascertain any differences.
  • ACT – Analyze the differences to determine their cause. Each will be part of either one or more of the P-D-C-A steps. Determine where to apply changes that will include improvement. When a pass through these four steps does not result in the need to improve, refine the scope to which PDCA is applied until there is a plan that involves improvement.

Once again, the most important point in all of this is ADAPTION.

Now put on your thinking cap for a minute. Let’s pretend that you make burrs as a ‘convenience’ to some customers.  You’ve discovered that you’ve really been able to cut down your production cost.  So much so that you make a very healthy margin on the ones you do sell.

You have a competitor who started off making burrs.  It’s their core competency.  It’s where they got where they are and NOW they are is starting to make end mills: your core competency. What do you do?

Use the loops: Do the ACT part!

One possibility is that you offer a low price volume promo to your distributors in certain markets to get them promoting your burrs.  Target THEIR core competency!  Go after them where is hurts. Go after them in their strongest market.  BUT, make it a feint: While they are busy trying to keep marketshare, you can expand your business in your core markets.

Don’t be afraid of any of the processes listed.  I’ve heard manufacturers say “I’m just a small company, that stuff is for big companies”  My response is generally along the lines of “How do you think those companies got to be big companies?”

Finally, take a look at some other process’ that are out there.  If you can use an already created template to do the reviews and analysis then grab them and utilize them.  The Hoshin Strategic Planning process is a good starting point.

Hoshin Strategic Planning
“The hoshin process is, first of all, a systematic planning methodology for defining long-range key entity objectives. These are breakthrough objectives that typically extend two to five years with little change. Second, the hoshin process does not lose sight of the day-to-day “business fundamental” measures required to run the business successfully. This two-pronged approach provides an extended period of time for the organization to focus its breakthrough effort while continuously improving key business processes day to day.”

Final Thoughts

I’ll Leave you with this:

“I have treated this game in great detail because I think it is important for the student to see what he’s up against, and how he ought to go about solving the problem of practical play. You may not be able to play the defense and counterattack this well, but the game sets a worthwhile goal for you to achieve: how to fight back in a position where your opponent has greater mobility and better prospects.” -Fred Reinfeld , The Complete Chess Course

Conducting Distributor Sales Meetings

Many times manufacturers set up sales meetings to introduce new products or new contacts for their company but do not set any goals or objectives for the sales meeting and the desired outcomes. If you want to stand out from the rest of the presenters then you should have an action plan in place.

Just like building a house, or making a part, you need to start with a blueprint.

Before we get into some nuts and bolts let’s take a look at the sales funnel process:

The Sales Funnel

The Sales Funnel

All sales meetings should be based upon an understanding of the sales funnel model:

  • Awareness: Train the sales force how to identify best prospects with 3-5 key prospect identifiers.
  • Interest: Train the sales force how to highlight 3- 5 primary features/benefits of your products to stimulate interest at the end-user level
  • Desire: Set follow-up meetings with vendor representatives and end-users.
  • Action: Sell the products!

Vendors fail to realize that distributor sales people may see several presentations in the course of a sales meeting day and hear multiple presentations. In the process of learning about the items you’ve got to remember that the salespeople will only retain 20% of what you talked about 1 week later and only 5% after one month.

If you can accomplish nothing else, the best method is to pick out several key points to highlight. Enough information for the field sales force to go out and “get themselves into trouble” Remember, at the outset you are merely trying to create awareness of the product or service. Keep it simple. You can go into detail but you want to control the information that will be retained and repeated to the end-users.

The goal of the sales meeting is NOT to close an order the next day, although that does happen, but to teach the sales people at your distributor “how to fish” and “how to find fish”

The following is some basic information your might want to use as a template and you can use/modify to suit your needs. These will be the basis of the sales meeting. We would like this information completed as much in advance of the sales meeting so that we can begin to identify prospects for your products.

Individual sales meetings with any vendor/manufacturer should be limited to 1 – 1 ½ hours. In an effort to insure that you cover all of the important issues it’s a good idea to set up a standard agenda format. A sample agenda follows. Obviously, if there is already a working relationship it’s not always necessary to go through every item. Although, if new salespeople have been hired and you’ve never gone over some of these items don’t be surprised if they don’t know.

NEVER ASSUME that what you have said is retained unless you’ve said it a million times

Sample Sales Meeting Agenda
1. Introduction and Background Bio /Experience
2. Review of Discounts
3. Review Policies and Procedures
a. Test Tool Policy/Guaranteed Trial Orders
b. Order Entry
c. Shipping/FOB Points
d. Returns/ Restock
e. Sample Tools/Trunk Stock
4. Review of key contacts inside, outside and engineering
5. Product Identifiers
6. Product Features/Benefits
7. Wrap-up Questions
8. Setting future field work schedules with the sales force

Prospect Identifiers
Identify 3-5 target prospect ‘identifiers’. This could be a type of machine, a type of material, an operation, etc. This should be followed by a questions that outside salespeople should ask about this item that they have now recognized.

An example is as follows:
Identifier 1: Cross hole burrs
Question: How to you debur those burrs? By hand? In a deburring machine? A deburring tool in the machine?

Identifier 1: ______________________________________________________
Question 1: ______________________________________________________

Identifier 2: ______________________________________________________
Question 2: ______________________________________________________

Identifier 3: ______________________________________________________
Question 3: ______________________________________________________

Identifier 4: ______________________________________________________
Question 4: ______________________________________________________

Identifier 5: ______________________________________________________
Question 5: ______________________________________________________

Key Features/Benefits
Identify 3-5 key features and benefits of your product or service. Many Manufacturers/vendors have a broad product offering and many products within that offering. However, you sell several products which have made you a market leader in certain segments. The GOAL is to talk about these key products and their advantages over the competition. Limit any detailed or in-depth exploration of technical features at the outset. Understand, that you can go over them in the course of the meeting The goal of these is to enable the sales force to stimulate enough interest to set up an appointment with you and their end-user. During those meetings our sales force will gain more in-depth product knowledge.

It’s also a good idea to layout your agenda in the form of a “cheat sheet” and tell the sales force at the outset of the meeting what you intend to cover. The agenda and lists are very useful to pass out at the outset so that the sales force can take notes. This is important. I’ve sat in sales meetings that start off fantastic. The sales force is very very impressed… but at some point in the meeting you start to see sales people’s eyes close, yawning, stretching, and then the presenter says “Ok, now we’ll begin to cover the next product” and you can almost hear everyone’s brain screaming “OH MY GOD, this is going to go on FOREVER!” Don’t let that happen to you.

You might also include in your list room for the salespeople to make some “Prospect notes” As you are talking the sales people may think of some of their customers who might be interested RIGHT NOW in something you say. It’s a good idea to review this with them at the end of the meeting and find out “Who has a list of people that we should talk to right now? Should we schedule some work times?”

Product 1: ______________________________________________________
F/B 1: __________________________________________________________
Prospects: ______________________________________________________

Product 2: ______________________________________________________
F/B 2: __________________________________________________________
Prospects: ______________________________________________________

Product 3: ______________________________________________________
F/B 3: __________________________________________________________
Prospects: ______________________________________________________

Product 4: ______________________________________________________
F/B 4: __________________________________________________________
Prospects: ______________________________________________________

Product 5: ______________________________________________________
F/B 5: __________________________________________________________
Prospects: ______________________________________________________

Sales vs. Marketshare – Are you evaluating market potential correctly?

The Evolution of a Field Sales Force

Before we get into some real nuts and bolts issues, let’s think about how business starts. It starts with a product or idea, someone goes out and sells something to someone near them. More customers are found and more is sold, typically, from the manufacturer directly to the end-user.

At some point the manufacturer of the product comes to their first crux point: One of two courses must be chosen:
1. Direct Sales Force
2. A Channels Strategy

Within these choices there can be any number of hybrid strategies:

  • A direct sales force that calls directly on end-users
  • A direct sales force that calls on industrial distributors and sells through them
  • A direct sales force that calls on “bigger” end-users directly and sells through a distribution channel
  • An independent manufacturer’s agent network that does any of the above already listed
  • Direct sales to industrial distributors
  • The list can go on based upon individual companies and territories.

Generally, there are exceptions to every rule or SOP and, when pressed, all manufacturers will admit to “grandfathered” exceptions.

The real key to this is that in most cases the management of the sales channel “evolves” along the path of least resistance. There is, at most, a basic understanding of the market areas rather than a plan or “map” of success. Sales Managers evolve over time as well.

Think of a new sales manager like a fur trapper from the last century. He arrives as a tenderfoot and, over time, learns the lay of the land. He protects what he has learned and will only share what she knows with others whom she trusts.

Ok, so where does forecasting come into play? Typically sales forecasts also evolve based upon “What did we do last year and what do you expect we will do this year?”

There’s nothing wrong with that as long as you just want to do better than the previous year. Too many managers get caught in this closed loop system and fail to look deeper into the the business. As an example, let’s look at that fur trader again. She’s hired a bunch of trappers and has a successful business. He’s impressed because over time, what used to be a terrible area for trapping has got a really hard working trapper and it’s delivering more business each and every year. But in the “great territory” he suspects that the trapper is not working. Times changed. The trapper in the formorly “bad” territory is sandbagging and only working a few days a week because the Beavers repopulated while in the former “great” territory it’s all “fished out”

But is that really what’s happening?

Sales vs. Marketshare
RULE #1: EVERYTHING in your forecasting should be about developing MARKETSHARE.

Let’s jump back into some big picture stuff.

The reason for this is so that you can adequately gage performance in key market areas. If you gage how your territories are performing based only upon sales volume you will not know who is performing up to par and who is not performing. If one market has a total market potential of $100M and another has only $4M and both territories are generating the exact same sales volume the territories are not equal. But how do you determine where the markets area? How big are they? How should you separate your territories?

I’m sure you’ve heard about not trying to eat the whole elephant but taking it one bite at a time. But where to start? Where is the target market for your products?

Marketing Campaigns & Military Campaigns
Let’s take a bit of a sidebar. If you understand that most management theory is based upon Military theory then perhaps the best thing to do is take a look at how the Military plans for success.

Operations Planning Model

Think about it: If someone is planning something where lives are at stake they are probably going a lot deeper than any marketing campaign you can envision. If you want a ready-made template for planning your marketing Campaign then take a look at The Campaign Planning Handbook from the US Army War College

One of the first things at the tactical level that the military asks is “What is the terrain?” They pull out a map.

Some More History
Maps are a great visual aid to sales planning and forecasting. So, to start, let’s think about how North America was settled. As the westward expansion took place the United States originally set State boundary lines along easily definable geographic lines such as rivers or mountain chains. Although many boundaries are along rivers, cities developed on both sides of the river as a result of easy transportation along waterways. The boundaries of States are not always the best way to define market territories since the market areas traverse the original State Line boundaries. County boudaries where essentially set up the same way. Population centers, and therefore business, developed along these same transport routes. That is why the concept of a Metropolitain Statistical Area, or MSA, is so important.

If you are measuring sales success by County it’s almost impossible to see any trends

County Map of Sales

County Map of Sales

The United States Office of Management and Budget (OMB) defines Metropolitan Statistical Areas according to published standards that are applied to Census Bureau data. The general concept of a Metropolitan Statistical Area, an MSA, is that of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core.

According to the 2000 standards provide that each CBSA must contain at least one urban area of 10,000 or more population. Each metropolitan statistical area must have at least one urbanized area of 50,000 or more inhabitants. Each micropolitan statistical area must have at least one urban cluster of at least 10,000 but less than 50,000 population.

Metropolitan Statistical Area Map

Metropolitan Statistical Area Map

Under the standards, the county (or counties) in which at least 50 percent of the population resides within urban areas of 10,000 or more population, or that contain at least 5,000 people residing within a single urban area of 10,000 or more population, is identified as a “central county” (counties). Additional “outlying counties” are included in the CBSA if they meet specified requirements of commuting to or from the central counties. Counties or equivalent entities form the geographic “building blocks” for metropolitan and micropolitan statistical areas throughout the United States and Puerto Rico.

If specified criteria are met, a metropolitan statistical area containing a single core with a population of 2.5 million or more may be subdivided to form smaller groupings of counties referred to as “metropolitan divisions.”

As of 2000, there are 362 metropolitan statistical areas and 560 micropolitan statistical areas in the United States. In addition, there are 8 metropolitan statistical areas and 5 micropolitan statistical areas. You can find a much more detailed map from this US Census Bureau link that you can print out

So why is this important?

National Highway System

If you undersantd that cities originally developed along transportaion systems you can understand how markets have developed. As the ‘west’ was settled cities tended to develop along river tranport systems. By the late 19th century streetcars led to the development of ‘suburbia’ and made room for the immigrant melting pot. Rail systems began to connect major metropolitain areas and by the mid 1960’s the interstate higway system started to connect the major MSA’s.

NOTE: Terrain has a direct impact on travel time.

To truly understand marketing areas you must have a good understanding of the topographical terrain and transport routes that support them. Today, markets develop along interstates. If  markets are disconnected there will be more “windshield time” between accounts.  When reviewing territories it’s always a good idea to understand the limitations imposed by terrain or traffic patterns.

NOTE: The US Census Bureau created the foundation of the ZIP Code system based upon population centers. MSA’s are a further refinement of that.

Performance Evalutation
MSA maps are certainly better for taking a look at overall territory structures. Population centers are a good indicator of where business markets are located. But to really drill down into where YOUR industrial business is located, manufacturing, then you need to overlay a more detailed business map.

These kind of maps can be very very large and space does not permit here on the blog to depict one. So instead let’s look at some micro markets:

SIC 33-39 Map Of Business NE-OH/W-PA

SIC 33-39 Map Of Business NE-OH/W-PA

Understanding the market areas:
Now we’ll dig into the actual data a bit more. Let’s evaluate two sales territories: Northeast OH and Western PA for SIC codes 33-39.

Land Mass

  1. Territory 1: WV panhandle and Western PA = 39,205 square miles (Based upon 3 digit ZIP codes: 150-169; 249, 254, 260-268)
  2. Territory 2: in Eastern OH = 10,487 square miles (Based upon ZIP codes: 440-449)

Territory 1: Western PA

  • Total Companies = 7,306
  • Total Employees = 260,068

Territory 2: Eastern OH

  • Total Companies = 11,208
  • Total Employees = 435,368

USMTC market growth data:
According to the June 2008 USMTC reports we know the following:

  • Northeast – PA north through New England – 08 sales versus 07 sales up 4.3%
  • Midwest – OH around through WI – 08 sales versus 07 sales up 81.5%

The Territory 2 market had grown substantially more than the Territory 1 market.:82.5% vs. 4.3%.

Territory Sales Comparison

Territory Sales Comparison

So what to do we know?
At first glance Territory 2 had higher sales dollars. But when we dig into the numbers we can see that:

  • Territory 2 has only 60% of the land mass of Territory 1
  • Companies: Territory 1 has only 5/8 the number of companies in Territory 2
  • Employees: Territory 1 has only 5/8 the number of companies in Territory 2
  • Sales per Employees in territory 1 exceeded territory 2
  • Territory 1 experienced minor market growth compared to Territory 2

What can we learn from this?
The key to this whole discussion is understanding your markets. As opposed to basing your forecasting on past experience or “gut knowledge” of a market area take some time and dig into the data.

Marketshare Potential is probably the best way to gage your success.

Take Aways:

  • Do I have a good understanding of where all of my markets are?
  • Do I have a good understanding or market potential in each territory?
  • Do I need to look at travel time between accounts?
  • Has business developed right around the corner from me that none of my salespeople are calling on?
  • Should split at territory?
  • Should I enlarge a territory?
  • Are my territory boundaries set up correctly?

Why Brand introductions FAIL in Channels Marketing

It took a long time for me to understand that there are some common denominators in why some fantastic brands fail while other, inferior products, are successful in channels marketing programs. Below you will find six key points to think about. Think of these six as cylinders in a car. If five of them are working but not six you’ve lost all forward momentum.

“Faulty execution of a winning combination has lost many a game on the very brink of victory. In such cases a player sees the winning idea, plays the winning sacrifice and then inverts the order of his fellow-up moves or misses the really clinching point of his combination.” – Fred Reinfeld , The Complete Chess Course

So, in my view, there are six core elements to any brand introduction in the eyes of distributors:

1. Marketing Materials – Are catalogs, price lists, flyers, trade show schedules, advertising schedules, lead processing all provided in a timely fashion? Does the vendor send in 25 catalogs for a sales meeting with a salesforce of 5 people and a customer base of 250? What is the package quantity of literature? Does the literature have a part number? Is there a literature request form? Who is that sent to? Are the marketing materials “intuitive”? (are all of the components needed to complete and order listed in the catalog? Is the catalog easy to use and find all related products? What about videos? Social media sites? Brand exposure?

2. Quality of Product – Does the product have “walk away reliability” or does it suffer from a myriad of quality issues. This goes beyond the product working as it was marketed to work and includes horseshoe nail problems (no torx screws in the box, partial shipment of all components. Is the distributor going to spend all the money that would have been made on the margin servicing the customer and trying NOT to get “egg on their face” in the process which will affect other product lines and the relationship with the customer?

3. Competitive Pricing – Does the product provide a good ratio of price to performance? Is the vendor adaptable and responsive to price corrections in a short time frame? Has the vendor provided all of the necessary sales information to “sell” the value added?

4. Availability – Is there stock? If so on what products? Many times distributors have heard on new product introductions that “there is plenty of inventory” only to find out that “Well, we have three pieces of everything”. If there is a stock out problem, is the vendor proactively responsive contacting the distributor on late deliveries before the distributor calls to expedite?

5. Customer Support – Is the field support and customer support team trained and up-to-speed on all of the products? Can they technically support the product line? Can they crossover competitive information? Do the support people say “I don’t know the answer to that” and end the conversation with “Are your happy with my your level of service today?” or do they say “I don’t know the answer let me find out and call you back in 10 minutes”. Are they responsive? Are they proactive? What is the SOP on quote turnaround ( 2 hours, 24 hours, 2 weeks)?
Customer service can take on many variations. I’ve listed a few for you to ponder.

The Customer Service Problem
I once spent 6 months trying to figure out why we weren’t getting more orders. The end-users loved it, the outside sales people loved it, the owners of the distributors loved it… then I found out that the inside sales person at the distributor HATED dealing with the manufacturer’s inside sales person who had a really poor attitude.

The Gun Shy Problem
Then there is the “gun shy” problem. The regional sales manager or agent has some “other” issue, typically some internal political issue with a POLICY of the manufacturer that is so out of the norm that the distributor can’t even grasp it. Want an example? At the end of a quarter every call made for an trial application is responded with “I’m not sure if that’s a good test” Even in cases where the promo video has almost the exact application featured! Finally, after much prompting you find out why:
“The accountants are really tightening up on trial applications/test tools”
“My boss is really riding me on any testing right now”
“I’ve gone over my trunk stock budget”

The New COST CENTER Problem
Sometimes, as companies grow they hire very well versed accounting and legal people. This can wreak havoc at the sales generation end of the business. In most cases, it’s good business, stuff the company should have been doing all along, but in others, it’s policies and procedures that, in my very humble opinion, (in deference to my need to keep accountants, lawyers and op’s people happy 😉 just create roadblocks to doing business. That being said, I was sent this video a couple years back by a very astute owner of a manufacturer.

The Young Gun Problem
I recently had a conversation with a “young gun” He called me after a week of us talking about a competitive opportunity and explained that he had not been in contact with me on my question because he was too busy handling all of the business at his BIGGEST distributor in another market. He had lost all of the notes from our conversation which I had not written down myself. He further explained that he had some health issues with his father with some medical testing. I explained that I fully understood, but I did not have time to talk about it at the moment as I was just walking into my Grandmother’s hospital room

6. Trust – Is there trust in the relationship? This is the “gut feeling” stuff. It comes out in the one-on-one conversations. Is something being held back? Are direct answers given? Is the manufacturer asking lots of questions as if he where going to handle the business directly or take it through a competing distributor? Is the manufacturer “throwing his weight around” and not really acknowledging that the distributor runs their own business? Does the agent or manufacturer call the end-user directly….and not tell the distributor or independent rep? Do they visit the end-user on their own?

The most successful brands are built on a foundation of trust and loyalty. Each party knows where the other stands. You can actually watch the relationships grow. In the early phases it may be that the distributor or the agent calls up the manufacturer and asks for something… The reprimanding parent response is “You know we can’t do that! We can do xxxx.” To which the smiling reply is “I know, but I had to ask.” Later, as the relationship evolves, when the distributor or agent calls up they say “Hey, we just promised this program and that promo with this product, I know I need you to approve it but I already quoted it while you where on vacation” and the response “Great Job, what else ya need?”

Perhaps, more than any other item on the list, this last one IS THE MOST IMPORTANT.

The “Agent” or “Regional Manager”
An agent or territory salesperson has a relationship with his customer: The distributor channel. It’s where they live, It’s where they put food on their table. Most of the smart independent agent, and even the factory guys, realize that the relationship is the most important aspect of their livelihood. Management comes and goes, manufacturers change gears, different managers come on-board with their own ideas and their own relationships, but the one consistent thing is the customers and that trust.

The Distributor
Distributors are even more protective of their turf. They have their territory marked and that is how they perceive it. When a distributor brings someone into their customer it is akin to bringing your first date to meet your parents. You are coming into their home, you are being extended the relationship that they enjoy. When anyone tells them “That’s MY customer” they are pretty offended and, like a dog, they’ll probably come back and bite you.

Brands are sold ONE person, ONE customer at a time until they tell two friends and so on, and so on, and so on, until it’s viral.

As a final thought, I’m reminded of a picture from the 1970’s that hung in the VP of Student Life’s office back when I was Student Senate President. It showed a picture of a HUGE Sit-In protest over some student issues. The caption read:

“Communication is the beginning of Understanding”

Good words to live by in your channels branding efforts