Posted at 07:40 AM in Governance, Networks & Alliances, Sales & Distribution | Permalink | Comments (0) | TrackBack (0)
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Firms that manufacture and sell complimentary, rather than competitive, products and services may wish to join forces to promote each of their products to prospective customers and thus look to increase sales for both products. The parties are not "distributors" for one another. What they do is make sure that when they are selling they are mindful of opportunities to mention the other products. If there is any interest the "lead" will be passed to the sales team of the other party. Of course, the parties can initiate more elaborate collaborative efforts if they wish; however, it is best to start small with a simple strategic alliance agreement. Key issues for such an agreement include designating a contact person on each side to coordinate efforts and making sure that the confidential information and customer lists of both parties are protected.
Posted at 08:05 AM in Networks & Alliances, Sales & Distribution | Permalink | Comments (0) | TrackBack (0)
While financial institutions have long been subject to federal and state law requirements relating to protection of nonpublic personal information gathered from consumers, it is now clear that businesses of all types will be subject to similar regulations in the future. For example,
When establishing appropriate compliance strategies and information security procedures for collecting personal information, companies should:
The content in this post has been adapted from material that will appear in Business Transactions Solutions (Fall 2008) and is presented with permission of Thomson/West. Copyright 2008 Thomson/West. For more information or to order call 1-800-762-5272.
Posted at 08:17 AM in Governance, Sales & Distribution | Permalink | Comments (0) | TrackBack (0)
Companies that have a significant volume of warranty obligations to their customers with respect to their products may outsource the necessary repair work to a third party manufacturer that will serve as an authorized service organization. The relationship between the parties should be memorialized in a refurbished services agreement. The agreement should describe in detail the exact services to be provided by the manufacturer which typically would include securing all products delivered for services and providing the repair services according to agreed specifications and using parts, tooling and packaging materials provided by the buyer. The manufacturer will provide trained labor and also contribute its own existing equipment for use in carrying out the repair services. A fixed price for the services would be negotiated that would provide the manufacturer with a steady and predictable stream of revenue while also giving the other party the advantage of controlling the costs associated with comply with its warranty obligations to its customers. The agreement should also cover standard issues such as delivery procedures, change orders, warranties, limits on liability, term and termination, payment terms, dispute resolution and confidentiality. The content in this post has been adapted from material that will appear in Business Transactions Solutions (Fall 2008) and is presented with permission of Thomson/West. Copyright 2008 Thomson/West. For more information or to order call 1-800-762-5272.
Posted at 06:48 AM in Manufacturing, Sales & Distribution | Permalink | Comments (0) | TrackBack (0)
An effective privacy program is one that simultaneously addresses privacy risks and business opportunities. As time has gone by there has been an emerging consensus on what constitutes “best practices” with respect to collection, use, retention, disclosure and destruction of personal information and companies should incorporate these principles into the planning and administration of their privacy programs. The following criteria included in the Generally Accepted Privacy Principles issued by the AICPA/CIPA are based on internationally recognized practices that have already been incorporated into a wide range of privacy laws and regulations in the United States and around the world and into recognized guidelines recommended by industry and trade organizations:
A thorough and effective privacy program includes policies, communications, procedures and controls, and evaluation criteria. Policies include written statements developed by the company that clearly describe the intent and goals of management with respect to privacy compliance and specific requirements, responsibilities, and/or standards. Communications include written and oral messages delivered by the company to the individuals whose personal information is at issue, internal personnel, and third parties about the company’s privacy notice and its commitments therein and other relevant information. Procedures and controls are other actions taken by the company to realize its goals and satisfy specific requirements, responsibilities, and/or standards. Finally, evaluation criteria should be comprehensive, relevant, clear and objective, and measurable so that management can determine the effectiveness of the program and take appropriate actions to modify the program to cure shortcomings and integrate changes in applicable legal and regulatory requirements. The evaluation process should include monitoring and auditing, performance measurement and benchmarking.
The content in this post has been adapted from material that will appear in Business Transactions Solutions (Fall 2008) and is presented with permission of Thomson/West. Copyright 2008 Thomson/West. For more information or to order call 1-800-762-5272.
Posted at 07:48 AM in Governance, Sales & Distribution | Permalink | Comments (0) | TrackBack (0)
A number of well-known fast growing companies have created the title of chief revenue officer ("CRO") as part of their executive team. The CRO is charged with ensuring that the company remains focused on identifying and exploiting all potential revenue streams for the company's products, services and other core competencies (e.g., technology). In order to accomplish this task the CRO must be given authority to intervene in and oversee the activities of several different departments, each of which will also have its own executive and top management group, including product development, sales, marketing and customer service. The CRO should be involved in every major new business development project and should have a say in which customers receive top priority and when and how the company sacrifices profitability in order to increase revenues, market share and customer loyalty. For example, the CRO should commission the research necessary to determine which customers have the highest potential for long-term revenue growth and should work with various functional departments such as sales and customer service to make sure that those customers are serviced properly. The CRO should also decide whether it is worth pursuing a new sales channel through a discounting strategy that may reduce margins in the short-term yet expose the company and its products to a whole new group of customers. Obviously the CRO must be highly effective in creating and managing cross-functional teams and reconciling the divergent views of managers in different departments. It is also essential for the company to provide real incentives for senior managers of departments such as sales and marketing to follow the direction established by the CRO.
The content in this post has been adapted from material that will appear in Business Transactions Solutions (2008) and is presented with permission of Thomson/West. Copyright 2008 Thomson/West. For more information or to order call 1-800-762-5272.
Posted at 08:11 AM in CEO & Executive Team, Marketing & Public Relations, Sales & Distribution | Permalink | Comments (0) | TrackBack (0)
New companies obviously have no brand recognition. While this is a liability in the short-term, it should be embraced as an opportunity for the company to build its own brand identify from the very beginning and style a message that it wants to convey to each of its stakeholder groups including specific customer segments. Since a start-up typically has limited resources to invest in traditional marketing tactics such as advertising and promotion the best way to get started with branding is to make sure that the company’s products meet real and important requirements of customers and that the sales group accurately conveys a credible message to customer regarding the features, benefits and performance of the products. In other words, customers must be trained to trust what the company says about its products so that they company is eventually perceived as a reliable vendor that can deliver on its promises and representations.
The marketing and sales groups are the key players in developing and communication messages about the company’s products to potential customers. It is essential that marketing and sales each understand the roles that they play and how their activities interrelate with each other. If an analogy can be made to a military campaign, the marketing group is akin to the air force in that it is responsible for creating messages about the company’s products that can be disseminated throughout the target market to soften up potential customers so that they are ripe for capture when they are eventually engaged by the company’s army of sales personnel. For established companies with more financial resources the “air campaign” of the marketing group can take the form of advertising campaigns that notify and educate customers in advance about the features of the company’s new products. However, since start-up companies rarely are able to finance this type of promotional push the marketing group has to think and act more strategically and provides its value by becoming experts in customer requirements and making sure that customer needs are meant during product development and the sales group has the tools necessary to demonstrate to customers how their needs can and will be satisfied by the company’s products.
In order to build credibility with customers and create strong brand recognition there must be a high level of coordination and communication between the people working in the marketing and sales areas. The best way to achieve these objectives for a new company is to have one senior executive responsible for both marketing and sales and to make sure that each group is fully versed as to their specific roles and the types of communication that needs to occur across functional boundaries. As for the marketing side, it should take the lead in studying the market and building links with customers in order to truly understand what customers are looking for in the business area in which the company is operating. At the highest strategic levels the marketing group provides significant input into which market segments the company should target initially and should create a blueprint for product design and promotion that can be vetted and endorsed by the entire executive team and then dispatched to each of the functional departments for execution. While the sales group will certainly have its own views on product features and pricing, there is tendency for sales to argue based on what was heard at the last customer visit in order to close the next deal. It is the responsibility of the marketing group to take a long-term view and impose the discipline necessary to begin building a permanent company message and brand reputation. However, marketing certainly cannot ignore sales and, in fact, should treat the sales group as a key internal customer and provide it with the tools and information necessary for them to be successful when engaging with prospects.
Growing companies should establish procedures to monitor how well the marketing and sales groups are collaborating and how effective each of them are being in fulfilling their specific roles in relation to identifying and satisfying the needs of customers. One way to evaluate the work of the marketing group is to look at whether or not it is perceived by the sales group as contributing value to the customer relationship process. One thing to look at is whether the marketing group invited to sales group meetings that include brainstorming about how to approach new customers. If marketing is included in these sessions that is a sign that the sale group values the information that marketing has collected about customer requirements and the knowledge that marketing has regarding specific product features and the way in which sales can differentiate them in the minds of customers. Another measure of the value of the marketing team is what percentage of its time is spent communicating with customers as opposed to dealing with internal issues. If marketing personnel are not in touch with the market they have little or nothing to contribute to the sales process and the sales team will ultimately come up with its own ideas for describing what the company is and why the company’s products are different. Finally, the value of members on both teams can be assessed by how often they are consulted by their counterparts on the other team regarding customer needs and how well the company’s products are satisfying those needs. For example, a salesperson who is continuously contacted by the marketing group for input on marketing decisions is likely well attuned to customer requirements and thus serves a valuable role in both areas.
The content in this post has been adapted from material that will appear in Business Transactions Solutions (2008) and is presented with permission of Thomson/West. Copyright 2008 Thomson/West. For more information or to order call 1-800-762-5272.
Posted at 07:46 PM in Marketing & Public Relations, Sales & Distribution | Permalink | Comments (0) | TrackBack (0)