3 Reasons for Running Sales Campaigns

Context

A friend the other day suggested that he drop his prices for a few weeks and I questioned what the rationale was behind the intended price drop. I wanted to check that there was a valid reason and it wasn’t just a knee-jerk reaction that led to the idea of creating sales campaigns.

Sale on green
Sale on green

I only know of 3 reasons for sales. I’ll define sales as campaigns based on a short-term price reduction, such as end of season sales, January sales, etc. To be clear, I’m avoiding discounting and similar activities to keep specific customers happy and/or make the sale which I see as a different set of activities.

The 3 Reasons for Sales Campaigns

1: Due to Inaccurate Estimates

The provider chain (including the parts supplier, manufacturer, distributor and/or retailer and any combination of the above) has inaccurately estimated the amount that customers will buy at the RRP. So they need to shift stock rather than have it build up in the warehouses or showrooms. This sometimes occurs because a new model is coming out or because the weather was as predicted (and so not as much ice-cream was sold the week before). The answer could be that the MRP/RRP was always too high for the market and so the price drop is, in effect, a reduction to a more valid price that the market can sustain.

2: To Acquire Customers

Another reason for limited campaigns is as the basis for lead generation in terms of selling nearer to cost or at a loss to acquire new customers. A reduction during the campaign can lead to a long-buying customer that otherwise could have been tempted by competitor offers. The typical view is that a the price of the reduction is vastly outweighed by the long-term revenue from the customer. However this should be validated in your own organisation. In some sectors, customers are increasingly becoming used to jumping from competitor to competitor, getting the new deals available only to new customers.

On that subject, it is also worth considering the aspect on existing customer. Some may feel maligned or forgotten, depending on how important the price reduction would have been to them.

3: Short Boost

To create a boost in what customers are buying for a short period of time. This could be to alleviate a cashflow issue, e.g. to avoid company administration or pay annual tax bills, etc, or could be to alleviate another pressure, e.g. warehouse needing emergency repairs so some stock needs to be removed (and sold) rather than stored. In the case of cashflow, this could have been considered as a subset of (1), in the money is the resource. However considering many of the instances requiring short term boosts are unforeseeable, the boost is instead intended to be used as a stabilising factor.

4: Shift unused resources

In most industries, there are resources that do not generate revenue if not  being actively used, but the companies need them available in case of larger contracts. For instance, telcos provide ports to corporate customers, the number is static so spare, unused capacity could be packaged into a campaign. Similarly, larger consultancies operate a bench (usually quite lean) with consultants who are not actively being resold to clients. However this this is just another form of (1). Had the company planned better, then these resources wouldn’t be spare. So we remain with 3 reasons.

Further Thoughts

The better the company at predicting and responding to the future needs of its customers, the fewer sales campaigns it will require. This does require the company to act on those forecasts.

The issue with (1) is that while it makes sense, there should be an associated activity. This secondary activity should be to look at whether the assumptions in the original plan are accurate in hindsight and whether they should stand for future forecasts. For instance, if you’re reducing your price to meet the market expectations, then actually that’s your price, not your originally-inflated price.

So you’re about to run a sale, which reason are you using?

Efficiency Through Motivation

Efficiency Through Motivation

I started an Instagram channel a while ago. I wanted to start generating an audience for my forthcoming course on Efficiency Through Motivation. I didn’t want to just post inspirational quotes; there are plenty of those channels already. What I wanted to do was to help people explore business architecture and strategy through asking questions of where they are at the moment. I’m using the images as the initial thought-provoker then writing related commentary, often in the form of prompting questions. Go have a look at EfficiencyThroughMotivation, does it work for you?

Actually, better than tell, how about you let me know what you think of the idea? Or even what stage of business you’re at at the moment, what are your struggles and how do you think you’ll be resolving them? You can reach me at Contact Us.

How many objectives do you set yourself each day and how many objectives do you set for your organisation? Are those objectives related?

A photo posted by EfficiencyThroughMotivation (@efficiencythroughmotivation) on

Enterprise Architecture in Startups: Is it relevant?

Ludo Board for depicting strategy
Ludo Board

Practitioners of Customer Development, Lean Startup and Enterprise Architecture can all learn from each other. But they shouldn’t enforce their views on each other as there are some incompatibilities. Let’s see how enterprise architecture in startups can exist.

Background

The Startup culture and methods have largely been defined by Steve Blank who wrote The Startup Owners Handbook and later, by Eric Ries who wrote Lean Startup. Both of these consider how newly-created companies can grow quickly and in the right direction for their founders and customers. Many authors and speakers followed, but for this article, we’ll mainly focus on these two.

Enterprise Architecture (EA) functions can be found in many large, mature organisations that have a need to get a grip on their ICT* landscape. Continue reading “Enterprise Architecture in Startups: Is it relevant?”

Designing for Everyone

Crowd of lego people
Crowd of lego people

Whatever system, process, technology we’re implementing, shouldn’t we be designing for everyone? Or at least everyone in the target customer segment?

Background

In the last couple of weeks, I’ve read a number of articles that have consolidated and made me reflect on my thinking about designing for disabilities and what counts as normal.

Having spent a number of years working in the health and social care sector, I’m well-versed in the practicalities of working with people with disabilities. But I still hate the phrase “people with disabilities” and every other similar phrase I’ve ever seen. I don’t like the word inclusion, not that I don’t like the concept itself, but that I don’t like that the concept has to exist. Hence the title of this article as “Designing for Everyone”.

What’s an average person?

I read The Atlantic’s article on how we’ve ended up with a definition of a normal person. That’s at the crux of a lot of the disparity that we can see in the thinking of a lot of designers; they design for the average person or people similar to themselves. By using the term designer here, I’m not necessarily thinking of an artist or a creative, but rather the person responsible for delivering a changed process, a changed organisation or a changed way of working. They may have a creative background, but often are from their own professional background, e.g. in the front-line work or a change management professional. Fortunately, a more creative influence is coming into the change profession, for example we’re seeing newer methodologies such as Design Thinking, Service Design and Inclusive Design.

The problem with most of these approaches is that they develop solutions for the average person. There may be several average people in the target. These personas should have been based on the likely customers that the service wants to attract/serve. But considering how many conditions and disabilities there are in the world, there’s no way to account for all of them. Instead, we’re back to averaging again and possibly some Pareto analysis to account for 80:20 of the target population. That still leaves 20% who are not included in the thinking behind the design.

And that’s part of the theme of the article; that by defining a normal, we start to react towards the average as the ideal and the non-average as divergent.

How can we be completely inclusive?

Microsoft have released their Inclusive Design toolkit. The start of the toolkit is a touch simplistic, especially if you’re worked in health and social care, but it gets interesting part-way through. I’m also aware that the beginning portion could still be a incredibly valuable education source for those not used to having think from this perspective. So for that reason alone, I’m grateful to Microsoft for having released it to the world.

But more than that, there are a few nuggets of quality information in that method that I haven’t seen written down anywhere else. I’ve had to reign in proposals by pointing out difficulties of interacting in the proposed manner, so the 2 points below resonate with me.

The first is the potential to abstract away from individual conditions and dis(abilities) to perform tasks and instead focus on the interact between the person, the technology and the environment. That way, you can focus on resolving issues or improving the interaction between the person and other people in the context of the environment and the technology used.

The second is that disabilities do not need to be permanent. There’s a description of a spectrum from permanent through temporary through to situational. And there are more people in situational or temporary with difficulties than with permanent disabilities.

I’ve cropped the slide here and clicking on the image will take you to Microsoft Design Practice.

Disability Spectrum showing difference between permanent, temporary and situational disabilities
Disability Spectrum

How do we include views of everyone?

This is an old source for me, but one that I still point people to when they’re thinking of how to approach their change programme. Beware though, it only becomes inclusive if you included a wide range of people in the interviews and in the service design. It’s a concept of Experienced-Based Design that I’ve seen from the health sector. It’s the best example of a co-production/co-design methodology that I’ve seen.

There are two sources for this: The King’s Fund and the archived NHS Institute for Innovation and Improvement.

Conclusion for Designing for Everyone

Implementing changes for people with disabilities is difficult to achieve since you’re already on the back foot with that perspective. We can see this by the difficulties involved in making websites accessible when that’s been added as an afterthought. Instead, by bringing the focus on a more inclusive design up-front in the process, we have the opportunity to design changes that suit many more people.

Above, I’ve listed a few articles and methods that could help influence others around you. The main item to take away concerns perspective; anyone involved in change has to be able to shift perspective to include that of all customers in the target segment.

Stakeholder Analysis

This is just a brief introduction to a classic method for performing stakeholder analysis. It’s a simple concept and I’m including it since it’s another good example of a 4-box model.

To misquote Helmuth von Moltke the Elder:

No project survives contact with the customer

Background

Every change activity has to deal with people. Whatever you’re planning, you’ll affect some people more than others and some of those people you affect will have a greater opportunity to influence your progress.

Continue reading “Stakeholder Analysis”

When is it Innovation?

The terms innovation and invention are thrown around with abandon. This is rife in the startup domain where the innovation is often relating to a business model and in ageing corporations where innovation is being used to revitalise the organisation. But when is it innovation? Or could we actually be thinking of invention, improvement or creation instead? Continue reading “When is it Innovation?”

Using Four Box Models

What is a Four-box Model?

It’s a simplified graph, depicting two axes and the four boxes start at the corners of the graph. There’s an example further down below.

Why Use Four-box Models?

I love four box models. They’re simple and since they’re simple, they force you introduce clarity where there may have been confusion before. This makes the message easy to convey and simpler to isolate.

As such, all 4-box models provide a way of clarifying the problem space. Even if the solution you end up with doesn’t fit into the 4-box model, they’ll have been useful in clarifying the thinking within the group.

We’re going to see how they can be useful by looking at an example from CRM.

Customer Relationship Management

There are two similar models from Customer Relationship Management (CRM). The first model relates a customer’s historic spend with their predicted future spend. The concept here is to help you decide what to do with different segments of customers.

4-box CRM Model depicting historic spend against future spend
4-box CRM Model

The customers that everyone wants are those that have spent a lot in the past and are likely to spend a lot in future. Continue reading “Using Four Box Models”

An Example of Bad Facilitation

Rethink the Carrot and Stick

The Wrong Quick Wins

A few thoughts from me on quick wins and why we go for the wrong type.

Hands up if you’ve ever had a project sponsor say they needed quick wins? Usually, it’s about showing that you’re doing something to the company board so your project isn’t cancelled or it’s about showing you can make savings. Both of those indicate an immature organisation that’s ready to cancel change activities before they’re due to return results. Some changes take time, some can be done more quickly. The same change activity isn’t necessarily the right type of activity to achieve short and long-term changes. So if you’re on a long-term change project and you’re asked for quick wins, start to head off the question with looking at the original plan for when you’re due to complete your first phase. A better idea is to use quick wins to generate motivation within the users. They didn’t agree to the change plan, instead their managers signed-up to it. They have some inkling of what’s going to change, or in the case of many organisations, they’ve seen many change activities come and go with little result for them. So you’re on the back foot already. Quick wins should be about the users, such as front-line teams or field workers. Listen to their needs, hear their pain, uncover the activities giving them the most problem. And only after you’ve listened, start to generate a few quick solutions to their problems. These solutions are not intended to be long-term fixes. Instead, the quick wins are simple changes that can alleviate their pain. That’s how you get people to believe in you. At the same time, you can be addressing the longer-term fixes. The best thing is that quick wins, when approached from this perspective are usually easy, sometimes just a case of asking another team to respond differently or moving some office furniture around so people can work with less stress. Remember it’s not about achieving savings but making the working lives easier. What’s your experience and how do you approach quick wins? #changemanagement #motivation

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