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NEWS
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Channel Reality…Let's Get Smaller
Keith Newman, ChannelMedia Editor-in-Chief |
Who are you? What is your offer? How easy is it to integrate your product or service into action? All of this gets rolled into a loose ROI calculation that your partner uses to determine the business potential of a relationship. Sure values vary based on the partner and company but these are three examples of questions that form the foundation for how you are evaluated.
Part of the answer is being prepared to address these points up front and not going in with another "bells and whistles" story. Part of the key might actually be thinking big but "getting small." Small as in not being arrogant like some of the large companies in this industry. Instead, be humble, responsive and focused. (Or, be none of them and just create a killer product, create huge customer demand and give your trading partner a better than average return on sales). But seriously, big companies have just more stuff like policies, procedures and people. That's not necessarily bad but it can work against you sometimes.
Hey, you want some feedback, information and input? Here are some more things to think about but if you don't like it just don't shoot me I'm only the Instant Messenger.
Buyers who share can share a Vendor's passion for great products should also share an understanding of their customers with their business partners. Unfortunately, it's rarely so.
CompUSA, Fry's are on a roll. But Tiger Direct might be the early pick for MVP at Retail this year. For example, did you see this one? According to the report published in Internet Retailer, Tiger Direct's website visitors spend an average of almost 12 minutes on the site. This time of 11 minutes and 53 seconds is nearly 1 1/2 minutes longer than second-ranked eBay, at 10 minutes 33 seconds. The report continues to detail Tiger Direct also outranked other leading computer and electronic sites such as CompUSA, Circuit City, Best Buy, Radio Shack, Sony Electronics, Sony.com, and OSDN. Tiger Direct has steadily increased its presence on the dot-com radar in the last several years with consistent customer traffic growth under the hands-on leadership of CEO Gilbert Fiorentino. "This is evidence of the quality service and products we provide here, the convenience and ease of using our website, and the satisfaction that our customers enjoy," says CEO Gilbert Fiorentino. "I am pleased with the results of our continuing efforts to broaden the quality, and scope of our e-commerce services as we approach our 20th Anniversary."
What are you going to do to get on a roll: Circuit City, Office Max? Staples, Office Depot - Watch this space. With all that's not right with the world (and this being an election year I have my anti-depressants at the ready) its surprising how many people have the time and energy to protest a Wal-Mart Store. Sears to computers: Hasta la vista. Market to Sears: Oh, did you say something?
Passing thought: Why aren't more people in the roles of "buying and selling" using online collaboration/presentations tools more? In fact, is anyone? I realize that there is nothing quite the same as being face-to face and its the preferred method but think about the time and energy used in setting up, preparing, traveling to get to a "physical" meeting. Does any Retailer employ video conferencing/web technology to reduce the number of face-to-face meetings?
eMachines Country Stores? Doesn't have a real clear ring does it?
Systemax, parent company of Tiger Direct, has officially named Matthew Ehrlich President and CEO of its ProfitCenter Software Inc. subsidiary. "With Matthew's leadership we have already seen such a great interest in PCS's Profitability Software Suite (a suite of hosted enterprise business applications). In addition, awareness in our PCS solution has grown based on follow-up inquiries we received from attending and exhibiting at the DCI CRM Conference and Exposition held in Chicago last week," said Richard Leeds, CEO of Systemax Inc. Matthew Ehrlich founded ProfitCenter Software in February of 2002 in an effort to help companies increase their profitability using web hosted enterprise applications. Mr. Ehrlich has helped pioneer the efforts to help enterprises to successfully increase efficiencies through focused use of a variety of ERP applications.
Online retail spending increased 17% for the week ending Feb. 29, reaching $1.22 billion from $1.04 billion for the corresponding week a year ago, comScore reported. Total retail sales for the week ending Feb. 28 were up 8.6% over the same week a year ago, according to ShopperTrak's National Retail Sales Estimate. Online travel spending was up 43% to $1.05 billion for the week ending Feb. 29 from $736 million in the corresponding week a year ago, comScore reports.
Financial Highlights: Wal-Mart Stores said March same-store sales are currently tracking at the high end of its 4 to 6 percent target growth range. In its weekly-recorded sales update, the world's biggest Retailer said Easter seasonal goods; food and electronics were among the strongest categories last week, while the West and Southeast were the strongest regions. The company said the paycheck cycle was difficult to read due to a snowstorm in the Northeast and Midwest Tuesday and Wednesday. However, "the paycheck cycle was pronounced in areas not affected by the snow," it said. Wal-Mart shares closed Friday, down 34 cents at $58.60. Shares of Transmeta (TMTA) surged 36 cents, or 10%, to $3.95 in pre-open trading after the chipmaker said overnight that NEC Electronics took an equity stake in the company as part of an agreement in which NEC will license Transmeta's technologies for use in NEC's chips. The company said NEC had purchased a "small percentage" of Transmeta's 25 million-share common stock offering which priced in early-December. Sharper Image reported fourth-quarter earnings of $22.8 million, or $1.40 per share, up from its year-ago profit of $16.9 million, or $1.26 per share, and in line with the average estimate of 11 analysts polled by Thomson First Call. Revenue jumped 29% in the latest three months to $278.4 million from $216.5 million in the same period a year earlier. PalmOne reported revenue of $242.5 million for the third quarter of fiscal year 2004, ended Feb. 27, up 22.6% from the $197.9 million reported during the third quarter a year ago. Net loss was $9.3 million, or $0.20 per share. This compares to a net loss from the year-ago quarter of $172.3 million, or $5.93 per share. During the quarter, PalmOne sold approximately 938,000 handheld computing and communications solutions, bringing the total number the company has sold to 25.3 million. In handheld computers, NPD reported that PalmOne increased its market share in U.S. all-channel sales (including retail, commercial and online) by 11% to 57.7% in January, the most recent monthly report, compared with the same period a year ago. "Over the past quarter, we strengthened our leadership in handhelds and saw excellent demand for our Treo smartphone," said Todd Bradley, PalmOne president and chief executive officer. "The strong results this quarter show that our strategy of delivering scale from the handheld product line, coupled with growth from the wireless product line, is working. We are very excited about our prospects." The company noted the following year-over-year operational highlights in the quarter's results:
- Revenue up 23%
- Average selling price of $233 per device, up from $169
- Gross margin at 28.9%, up from 23.8%
That's it for now…now go make some of your own news!
ChannelMedia Q&A
w/Dave Nalley, Vice President and General Manager of Sales
1. It looks like Ingram is on track after another good quarter. Can you give us some of the highlights, particularly from your division?
We ended 2003 on a high note, with fourth-quarter sales and income exceeding our expectations and the guidance we issued in October.
North America and Europe in particular were impressive. In North America, our operating income was $51.6 million or 168 basis points, an improvement of 40% or 44 basis points versus a year ago. North American sales were 45% of the total or $3.08 billion, an increase of 4% versus the prior year and 20% sequentially. Bottom line, we out performed our own expectations, not too mention the streets expectations.
2. What is happening that you can see such an improvement?
The improved economic conditions were beneficial, but our proactive initiatives are what really made a difference this quarter. We successfully carried out a plan to increase our sales within targeted accounts and Vendor lines. Simultaneously, we broadened our market leadership position by adding additional share, and enhancing overall profitability. We'll continue to be a market-share leader because we are different from our peers.
In addition, the market place is embracing technology much more so than any other time in our history. We're seeing demand from all places of the world. Technology is a must have in the office and is becoming a staple in the home. In the U.S. in particular, we're seeing demand stem from people of all ages - children who want the latest gaming technology to adults looking to simplify their life with combo-devices (cell phone, PDA and email all in one). Technology is everywhere.
3. And now you are going to take over the CE market? Seriously, what are your short-term goals for the CE marketplace?
Our short-term goals are to expand our product, service and solution offerings in categories that are a natural fit for our existing customer base. Essentially, we are going to use our scale and customer breadth to increase CE manufacturers efficiencies, sales and target markets. Because of our reach, we can provide CE manufacturers value propositions that increase margins while reducing channel costs and Retailers trust us and in many cases would rather do business with us versus the manufacturer. We've been their go-to-market partner for years and understand the ins and outs of the supply chain.
For more than 20 years we've helped hundreds of IT and CE manufacturers use their supply chain as a competitive springboard to win market share and maximize profits. We can also deliver armies of value-added resellers that would not otherwise be reached by traditional consumer electronics Retailers. Solution providers merge the IT and consumer worlds with cross-functional expertise that places them in an ideal position to help consumers build networked homes.
Another notable point that is fueling the CE marketplace is the growing number of business technology manufacturers adding home networks and digital convergence to their spectra by either bringing on new products or acquiring a consumer electronics company - look at Cisco's acquisition of Linksys. We have longstanding relationships with these manufacturers so it's both logical and economical to expand our strategic partnerships with them to include their CE business as well.
At the end of the day, Ingram Micro continues to have the most profitable go-to-market strategy for both consumer and commercial technology manufacturers.
4. And your Retail/Consumer Group's longer term vision?
We plan to actively develop areas of opportunity ahead of our competitors. The trend toward converging technologies isn't slowing down and as such, we are aggressively pursuing relationships with consumer electronics manufacturers. Business and consumer markets are blurring - plasma TVs are now common in boardrooms and wireless networks are popular in homes. Our superior connectivity infrastructure with Retailers and strong ties to the SMB market through our solution provider customers, is a compelling sales and marketing proposition to IT and CE manufacturers-by turning to Ingram Micro they can expand their reach in just a matter of days.
Channel Digest:
New Management at Ingram Micro, Maxtor & Synnex
Ingram Micro announced the promotion of both Gregory Spierkel and Kevin Murai to corporate president, reporting to Chairman and Chief Executive Officer Kent B. Foster. The presidents, who assume their new duties today, are jointly responsible for the overall operating performance of the company. In addition to their company-wide responsibilities, Murai will focus on the North American and Latin American regions, while Spierkel will focus on the European and Asia-Pacific regions. Previously, Murai and Spierkel were presidents of the North American and European regions, respectively. They will join Foster, as well as Executive Vice President and Chief Financial Officer Thomas A. Madden, in a newly formed Office of the Chairman. Murai has been with the company for more than 15 years, leading the Canadian and U.S. regions before the two countries were combined to form the North American region in January of 2002. In addition to his regional responsibilities, he led the successful profit-enhancement program, which was completed ahead of schedule, within budget and generated savings above target.
Maxtor and SYNNEX signed a distribution agreement whereby SYNNEX will market and sell Maxtor's full line of drives throughout the United States and Canada. "We welcome SYNNEX to our family of distribution partners. We are excited about the opportunities this relationship will provide," said John Vossoughi, vice president of Pan American Sales for Maxtor. "Our distribution partnerships continue to play a key role in supporting the needs of both traditional and emerging opportunities for storage. SYNNEX has growing direct sales capabilities to regional OEMs and vertical integrators, which will help Maxtor achieve its goal of touching more customers in more markets, more often." Added Maxtor: "We're pleased to be partnering with a company whose technical expertise, customer support and commitment to the channel are high priorities," said Steve Ichinaga, senior vice president of Systems Integration at SYNNEX Corporation. "Maxtor is a leading brand in the market for high-performance and high-capacity hard disk drives. We look forward to working together to leverage each other's strengths
and provide the latest storage and IT computing solutions to our customers."
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Sponsored By
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RESEARCH
HDTV - Not a Question of If or When, but What, Where and How?
By Steve Koenig, CEA
A consumer survey examining HDTV ownership conducted by CEA in March found that half of U.S. consumers plan to purchase a HDTV for their next TV. Still, 34% of consumers do not plan to buy a HD set as their next TV and 25% of consumers go further to say they have decided against buying a HD set for now. Confusion and price initially surfaced as the underlying reasons leading consumers to decide against buying an HDTV. But looking deeper into the survey results, CEA found more probable motives.
Since 1998 the ranks of HDTV owners have steadily grown and the industry as a whole has taken giant strides forward in making HD technology more affordable for consumers, while boosting the availability and accessibility of HD programming. The digital TV course has been set and we are well underway.
This year CEA estimates the number of factory-to-dealer shipments of digital television sets in the U.S. will top 5.7 million units - almost 40% more than the 4.1 million units shipped in 2003. Over the next several years, unit shipments of digital televisions will continue to ramp-up, approaching 23 million units in 2007. An accelerating shipment volume in conjunction with falling street prices and new, emerging display technologies will help drive HDTV penetration in the U.S. steadily higher. CEA believes HDTV penetration among U.S. households is now close to 10%; however the rising tide of digital TV shipments will push penetration to an estimated 53% by 2007.
The question then is which HDTV experience will consumers choose? At present, consumers have numerous technologies to pick from when selecting a digital set - CRT (tube TV), rear-projection, or a slim flat panel (either Plasma or LCD). CRT or tube displays will likely retain the greatest share of unit shipments for the foreseeable future. By 2007, CEA expects CRT displays to represent roughly half of all DTV shipments, with their flatter cousins (LCD and Plasma displays) accounting for about one-third of the overall unit volume. Meanwhile, rear-projection models, the kings of the big-screen, are expected to claim a 14% share of DTV unit shipments by 2007. New microdisplay technologies including DLP (digital light processing), LCoS (Liquid Crystal on Silicon), and LCD rear-projection have improved the picture quality and resolution of rear projection sets - drawing renewed consumer attention to the segment.
With an abundance of choice in the size, shape and display technology of DTV sets available today, what are some of the challenges facing consumers as they look to trade-up to high-definition television?
The study showed that approximately one in five consumers say they are confused about HDTV. Some of the beliefs describing confused consumers in the study included: can't be sure you're buying the right thing; too many TVs to choose from; or HDTV is too technical to understand. The study also found that confused consumers are more likely to populate lower income, lower education, and higher age brackets. Confused consumers were even unsure about where they were in the sales process, with few of these respondents conducting research, consulting with retail salespeople, or pricing any of the options.
This situation suggests a different explanation than just confusion - essentially, many consumers who had ruled out buying a HDTV had not performed much research. Thus - consumer confusion about HDTV could be diminished if consumers are willing to research the technology and the price options.
Apart from the confused crowd, price is one issue confronting the majority of consumers. The research shows over two-thirds of consumers who do not own a HDTV say they have not yet purchased a HD set because of price. Considering that household incomes vary widely, price can be a genuine and legitimate concern in some cases.
Street prices for DTV sets will continue to contract as they have since 1998, steadily lowering the cost of entry to the HDTV realm. As a result, consumer apprehensions over price will likely subside as HDTV sets proliferate the market. To put the price decline of DTV sets in perspective, consider that street prices for these models fell 50% during their first five years in the market. By comparison, prices for color TV sets dropped only about 6% in the first five years after their introduction.
One of the keys to growing the HDTV market is assuring consumers can obtain the right information about HDTV at the right time. In fact, the study reveals consumers overall would like more information about HDTV, but are not necessarily sure where to find it or whether the information is reliable or credible.
The study shows roughly one-third of consumers believe manufacturers' web-sites are the most credible (mostly or completely accurate) source of information about HDTV, followed closely by friends and family members at 31%. Only about one in five consumers believe retail salespeople deliver mostly or completely accurate information about HDTV - a statistic that CEA is already helping to change.
Retail salespeople are highly valued advocates of CE technology and are increasingly important sources of consumer information about HDTV technology and products.
At the 2004 International CES, CEA launched its web-based CEKnowHow program designed to assist retail sales professionals increase their CE product knowledge, including HDTV, and improve their selling skills. Sign up and learn at www.ceknowhow.com.
Steve Koenig is Senior Manager of Industry Analysis at the Consumer Electronics Association. Steve has covered technology products for the past 10 years, working at analyst firms ARS, PC Data, and NPD. In addition, Koenig was a senior editor at Computer Retail Week. Contact him at skoenig@ce.org.
Interactive Entertainment
By DFC Intelligence
Two new reports from DFC Intelligence highlight the increasing similarities between the video game and interactive entertainment industries with the music and movie industries. In The Business of Computer and Video Games 2004, lead author and DFC president, David Cole, notes, "Revenue for the video game industry could pass the music industry in the next five years. More adults are playing games, the industry is expanding on a worldwide basis and online distribution is becoming a reality."
A companion report, The Impact of Licensing in Interactive Entertainment, discusses the growing importance of licensed brands in the video game industry. According to lead author Dave Watson, "Companies are quickly learning that for certain well-known properties licensed from other media, having the best brand can be better than having the best game play." According to DFC, in the U.S., household penetration of console game systems is about 43% and has not substantially grown in recent years. Market growth has come from increased usage of game systems within households. More households have several users, own multiple systems and have a tendency to purchase more software per system (higher tie rates). The industry is also expanding on an international basis. The next growth challenge for interactive entertainment companies will be to expand into emerging markets while maintaining growth in core markets. Emerging markets include South Korea, Taiwan, Singapore, mainland Asia, Australia, Eastern Europe and others. On the downside of industry growth, the report discusses the issue of rising development and marketing costs. "The interactive entertainment industry is still nowhere near the size of the movie industry," says Cole. "However, production values are starting to compare with those in feature films. Increasing consumer expectations, along with other factors including the rising cost of talent, the need for large-scale marketing campaigns, adding online components and demand for high profile licensed properties are substantially increasing costs." The new DFC Intelligence report is 590 pages and provides users a comprehensive overview of the latest trends and how the interactive entertainment industry functions. DFC Intelligence is a market research firm focused on video games, PC games, online games and interactive entertainment. They offer free monthly research briefs to anyone signing up at http://www.dfcint.com/mailing_signup.html.
COMMUNITY
Top-Selling Software
Week of March 14 – March 20, 2004 |
| All
Categories |
| 1 |
TurboTax 2003 Deluxe |
Intuit |
$40 |
| 2 |
Norton Antivirus 2004 |
Symantec |
$42 |
| 3 |
Battlefield Vietnam |
Electronic Arts |
$36 |
| 4 |
TurboTax 2003 Multi State 45 |
Intuit |
$29 |
| 5 |
Taxcut 2003 Deluxe |
Block Financial |
$23 |
| 6 |
Unreal Tournament 2004 |
Atari |
$32 |
| 7 |
TurboTax 2003 |
Intuit |
$20 |
| 8 |
Norton Internet Security 2004 |
Symantec |
$66 |
| 9 |
Taxcut 2003 State |
Block Financial |
$23 |
| 10 |
TurboTax 2003 CA State |
Intuit |
$29 |
| |
| Games |
| 1 |
Battlefield Vietnam |
Electronic Arts |
$36 |
| 2 |
Unreal Tournament 2004 |
Atari |
$32 |
| 3 |
Unreal Tournament 2004 Special Ed |
Atari |
$32 |
| 4 |
Call Of Duty |
Activision |
$47 |
| 5 |
MS Zoo Tycoon: Complete Collection |
Microsoft |
$30 |
| 6 |
The Sims Deluxe |
Electronic Arts |
$20 |
| 7 |
MS Age Of Mythology |
Microsoft |
$32 |
| 8 |
MVP Baseball 2004 |
Electronic Arts |
$40 |
| 9 |
MS Flight Simulator 2004: Century Of Flight |
Microsoft |
$48 |
| 10 |
Hoyle Casino 2004 |
Vivendi Universal |
$23 |
| |
| Business |
| 1 |
MS Office 2003 Student/Teacher Ed |
Microsoft |
$143 |
| 2 |
QuickBooks 2004 Pro |
Intuit |
$249 |
| 3 |
QuickBooks 2004 |
Intuit |
$198 |
| 4 |
MS Office XP Student & Teacher Ed Acad |
Microsoft |
$136 |
| 5 |
MS Office 2003 Pro Upgr |
Microsoft |
$291 |
| 6 |
Norton AntiSpam 2004 |
Symantec |
$40 |
| 7 |
Pop-up Stopper Companion 3.0 |
Panicware |
$30 |
| 8 |
pcAnywhere 11.0 Host & Remote |
Symantec |
$195 |
| 9 |
Act! 6.0 |
Interact Commerce |
$205 |
| 10 |
MS Office 2003 |
Microsoft |
$390 |
| |
| Home
Education |
| 1 |
Professor Teaches Windows XP 4.0 |
Individual Software |
$15 |
| 2 |
Mavis Beacon Teaches Typing 15.0 Deluxe |
Riverdeep Interactive |
$30 |
| 3 |
Instant Immersion Spanish Deluxe |
Topics Entertainment |
$32 |
| 4 |
Typing Instructor Deluxe 16.0 |
Individual Software |
$21 |
| 5 |
Mavis Beacon Teaches Typing 15.0 |
Riverdeep Interactive |
$20 |
| 6 |
Instant Immersion French Deluxe |
Topics Entertainment |
$31 |
| 7 |
Adventure Workshop 1st-3rd Grade |
Riverdeep Interactive |
$18 |
| 8 |
Dora The Explorer Animal Adventures |
Atari |
$20 |
| 9 |
Adventure Workshop 4th-6th Grade |
Riverdeep Interactive |
$18 |
| 10 |
Jumpstart Advanced Preschool 2003 |
Vivendi Universal Publishing |
$29 |
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| List is based on units sold by twenty-three channel partners. All lists contains titles with an ASP of $14.49 or more except for the business list which requires an ASP of $19.99 or more. For more information, please contact The NPD Group at (703) 376-6200. |
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How to Optimize RetailVision
By Dwayne Bellow, Partner at The Bellow Group |
Some thoughts with channel veteran and RetailVision expert Dwayne Bellow on maximizing your time attending RetailVision
Dwayne, what values can Vendors see from attending RetailVision?
RetailVision is the most cost-effective way to meet with the top Retailers in the marketplace today. Unlike trade shows, where it is very difficult to spend time in a productive setting, you have the opportunity to build relationships and partnerships with key buyers and decision makers. There is no other venue that offers the same potential to meet with, present to and receive feedback from these influential people.
How can companies be successful with so many other Vendors competing for time with the Retailers?
Part of your success depends upon your pre-show planning. If you take advantage of the pre-show scheduling system the Retailer knows you're coming. And if you've done a compelling pre-show mailer or contacted them via phone to let them know you're coming, they will want to spend time with you quicker than someone who hasn't. Also, don't spend all of your networking time talking about business! Retailers like to build relationships as well, which means they are not necessarily interested in listening to boring sales pitches constantly or always talking shop!
What makes the boardroom presentations worthwhile?
You're actually presenting to many decision makers for your products. If there's a buyer in your meeting that's not the decision maker for your products they will typically pass the information on to the correct person when they return home. You'll get great feedback from outside your organization. Often in the Vendor community you can become complacent in areas like packaging or channel programs. Retailers will share great insight on what's worked and what hasn't, as they want your products to be a success as much as you do. Ask for feedback. If they have objections, be prepared to answer. If you don't have a convincing argument or their suggestion makes sense, tell them you will make the changes or at least consider the changes they suggest. Again, you're trying to sell your products in the retail channels. Use the time wisely to illicit feedback.
How can I make the boardroom presentation successful?
Be prepared! Make sure you spend lots of time rehearsing! Know you're materials, products, competitors inside and out. Have your BEST presenter! If you don't have someone that's articulate, energetic, and happy to be there, get someone! Just make sure they are well prepared and not just a "pretty face." Make it fun, interactive, and informative. Many companies try to come up with memorable "gimmicks or skits." That's fine and it may earn them the "best presentation award." However, your presentation needs to be memorable as well because the Retailer needs the product and it offers a benefit to them. Know the audience, it's usually a mixture of attendees. What value do you bring to Big Box Retailers as well as On Line Retailers? Communicate a clear marketing and merchandising strategy and you'll succeed.
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"In my opinion RetailVision, is a key element of a successful marketing strategy that resulted in building some of the most successful brands in the consumer market today." |
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What can I accomplish in a 15 minute one-on-one meeting?
Use the time wisely. Retailers want to spend that 15 minutes figuring out who you are, what you do, and how you can add value to their organization. Don't use the time to ask the Retailer to explain how their company works, use it to show them how you can drive sales and profits by carrying your products.
Who should we send to the event?
Your best business development representatives should attend along with your best product people, your senior management responsible for the Channel. You want people there who want to be there. RetailVision should not be a place to send people just because they want to get out of the office for a few days.
How important is it to attend the Orientation events?
Vision Events does a great job trying to prepare Vendors to have a successful event. Even after attending the event for over 10 years I always find it useful to attend. It's great to hear insight from channel associates. It's a great way to network with other Vendors who may want to work together on creating great channel promotions. Have your entire team visit the site and really get a feel for the event. Some companies view the event as another "trade show"; it's far from it. There is a completely different dynamic to successfully attending the show. By spending time on the RetailVision site you'll better your chances of making it a success!
The author has been in the retail channel for over 20 Years as Sr. Director of Sales at Belkin Corporation and Senior Vice President of Sales for Gemini. Dwayne Bellow is a partner at The Bellow Group. He can be reached at 949 240 3145 or dbellow@thebellowgroup.com
Secrets to Regaining Profitable Revenue Growth
By J Caldwell, Business Launch
After three years of cost cutting, executives must now turn their attention to regaining revenue growth and doing it profitably. However, what worked in the late 1990s will not work in this economy. What are the secrets that companies like Cisco, Microsoft, Dell, and others are using to regain positive year over year revenue growth? This email is the first in a series that will uncover those secrets...
Secret #1 - It starts at the top - but it doesn't end there!
During the last three years, most executive meetings, programs, conversations, emails, memos, and briefings have all revolved around cost cutting. Cost cutting and expense control have now become inculcated within the culture. Morale may still be low. Creativity has been replaced with a "survivor" mentality. People have been trained to think about cost avoidance and to minimize risks.
Regaining revenue growth will not be easy and it will not simply occur because top management starts talking about it. The secret that successful firms are using to regain revenue growth is that they are energizing and mobilizing their entire workforce to identify ways to grow revenues and profits. Regaining revenue growth can't become just the latest "edict from management". It must take over the culture just like cost cutting and expense control did during the last three years
Secret #2 - Embedding revenue growth into the DNA of your firm!
First of all, acknowledge that this will be a process, not a project. It will be a marathon, not a sprint. It will take a while to get people to believe and trust again. That will not happen over night. You must drive it down into every level of the organization. You must think horizontally, not functionally. You must get departments who don't think they even interact with customers to be thinking about revenue growth.
Second, plug into the grapevine. You will need to identify and dispel the myths that inhibit the company from regaining revenue growth. Every leader needs to confront excuses like, "we are in a mature industry…we are in a slow growth industry…we have so much market share that there is no room to grow…the customers are only buying on price…growth is not possible for us…growth is out of our control…we are in a commodity business….there is no way to differentiate ourselves...the economy is not growing."
Sustainable, profitable, revenue growth in your market is possible, but you will have to employ different techniques to find it, position yourself to capture it, and then execute cross-functionally better than ever to dominate the market. That's where we come in.
To speak with the author of this piece you may email him at jcaldwell@businesslaunch.biz to line up an appointment.
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