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EDSR INFORMATION 07-08-2002 MARKETING •Bogus Business Ideas popular Ideas That Raise Havoc If it sounds new, exciting and intrigu- dotcom would change businesses ing, we want to believe it. We also overnight. Countless companies and assume it's true. While there may be investors went for broke on the word exceptions to every rule, there aren't of hoards of 23-year-olds. The trip many in this case. Several examples tell from going for broke to going broke ...::.. the story. was dramatic and short. We've all heard the term "customers We are always ready to go for the for life." Even though the idea flies in simple solution, the instant answer the face of the reality, there are those or the magic potion. Each one who cling to it uncritically, believing sounds exciting, but most are also that in some miraculous way they can bogus. All appear profound, but they are hang on to customers forever. But ask also in error. Here are seven popular any salesperson if this is possible and business ideas that get companies in you'll hear the truth. trouble. Some customers last longer than 1. Valuing Value-added. This one others, of course. But they all have a life continues to enjoy undeserved popular- n. To operate on the premise that ity. What has allowed it to survive for so ey are forever is delusional. "Cus- long? The answer may lie in the fact tomer for life" lasted as long as it did that it is meaningless. because we wanted to believe that the Most of what companies view as impossible was possible. value-added is either what they are Then, of course, there was Quality doing already or is worth so little it is Management (QM). This was touted as devoid of value. Why is value-added the panacea for catching up with the always what a company, not the cus- Japanese and getting ahead of everyone tomer, wants to believe is valuable? else. Companies large and small clawed Value should play a key role in doing their way on to this bandwagon. At one business, of course. That's what custom- engineering firm, work stopped as the ers expect. But the focus should be on employees spent a year, mostly in what customers value, not what we meetings. think is important. That is inherent When management figured out that value, not something that's added. little work was getting done, QM disap- "Brands that have a simple promise peared quickly and silently. It all hap- and have delivered on that promise for a pened because we wanted to believe long time top the fall 2001 Equitrend that QM was the solution. best brands study," reports Research And who can forget the highly paid Alert, February 1, 2002. Once again, guru who advocated creating chaos in Craftsman Tools is at the top of the the workplace. By his standards, a heap. Its lifetime, no `questions' asked company like Enron is destined for guarantee resonates with tool buyers. 41imited success while Wal-Mart is That's built-in value, not value-added. aded for the scrap heap. Creating 2. Over emphasizing profits. chaos caught on because it was new, There's nothing wrong with the word different and exciting. profit. It's what business is all about. Then we wanted to believe that Not surprisingly, most business owners April, 2002 Business & Industry MAGAZINE 41 MARKETING and managers put making profit as the customers who buy produce what eves number one reason for being in busi- business needs-profits. ness. While the response may be 100 But it all starts with the right focus, percent predictable, it is also way off not on profits but investing in creating base. customers. In fact, it may be a good idea to stay 3. Constantly pushing sales. It away from those who are obsessed with sounds almost subversive to suggest profit. They tend to behave irrationally, that getting more sales can be a treach- often undermining strategies that make Brous business objective. To take it a for higher sales, customer satisfaction step further, pushing for sales generally and increased margins. Their distorted leads to price-cutting and tarnishing the thinking leads them to believe that brand. It can certainly produce short- cutting is the formula for growth. term gain-along with the long-term What makes more sense is establish- erosion of market credibility. ing conditions that produce profits, Panasonic has long been a niche such as creating and cultivating custom- player in the personal computer busi- ers so that they conclude that doing ness. Instead of trying to buy market business with you is in their best inter- share with lower prices, the company est. Those who are convinced that they has taken a far more strategic approach. have made the right buying decision The company is expanding its line of become enthusiastic and loyal custom- rugged Toughbook laptops that meet the ers-who buy because they believe and demanding needs of users operating in don't switch because of price. And adverse conditions. Panasonic owns il this particular market with pricey laptops that set the standard for dura- bility. When Louis V. Gertsner, Jr. took over ' the CEO job at IBM in the early 1990s, the company was languishing. Quickly, Gertsner assessed the situation and concluded that the task was building aid Meehande* IBM from the customer back-not the other way around. 114 From 1 Ib.to The IBM focus moved from selling +` 30,000 Ibs.� products to making customers, a strat- from proto- egy that has taken the company to the 0types to pinnacle. mein rims, 4. Going for simple solutions. Is we have full there a company anywhere that hasn't �St h left a trail littered with an array of imm _ . ' quick, simple solutions? 104,4 For decades, ad agencies have lived off of pot-of-gold-at-the-end-of-the- rainbow projects. It's often a, "great ad e1 campaign," "a fabulous Web site,, or a INDUS'1RwS,INC. "knock 'em dead" brochure. The behav- ior mimics that of kids who drive theta Cedar Grove,w153oi3 Fax(920)668-8998 parents crazy until they get the latest and greatest toy. The "but everybody has one"pleas result in countless trips to the toy store. Circle 32 on Rapid Response Card 42 Business & Industry MAGAZINE April, 2002 MARKETING " Companies are no different. An reported the company president. "This organization approached a marketing prospect wanted to buy. Yet, the sales- firm about preparing a capabilities man kept throwing more into the deal brochure. After asking a series of ques- even after we had the order. To make it tions regarding the proposed use of the worse, the new customer hadn't asked brochure, the intended audience, and for any special consideration." the overall marketing strategy, it was How often does this happen?A more clear that the client saw the brochure as important question is why? Why do we a quick, simple solution to a highly focus on price even when the customer complex issue, one that demanded doesn't? careful thought, research, planning, The answer to these questions in- execution-and budget. volves what can be accurately called the Unfortunately, simple solutions are "price addiction." In other words, we almost always bogus. make the assumption that the only thing 5. Adopting a "just do it" atti- that will grab the customer is the lowest tude. When the poet T.S. Eliot wrote, price. More often than not, it's the "This is the way the world ends, not salespeople who lead the customer to with a bang, but with a whimper," he focus on price. may have had something else in mind, Agway Feed & Nutrition dairy feed but his words are the perfect descrip- sales manager Frank Ziacik, Jr. works to tion of the life-cycle of most business align with what his customers value. initiatives. "The possibility of higher milk produc- We launch lots of projects, programs tion gets the attention of farmers," . campaigns with great fanfare- but most end with a whimper. Whether it is the quarterly cus- s PROUDLY MADE tomer newsletter that never went /). /;:"..*:-. Iry beyond the first edition, initiating a r _ /// / ! �, .:Aki USA prospect development program that -' , G ,.,„.%,...' .__). stalls before it gets going, setting Y� up sales training that fades after SCREW MACHINE PRODUCTS INC. the third session, or updating the 5 company Web site, the problem doesn't rest with the activities themselves. Failure is in the execu- tion. '"►; We have just what you want, "Just do it" makes sense inwith over 30 years of experience, getting a project off the ground. ISO 9002 Registration, and But that isn t enough. Without a • Si% reasonable lead times. We have 100 plan, a process, and accountability Swiss Automatics with capacity up for implementation, "just do it" "" to 3/4" diameter in most materials. doesn't get it done. Contact A.M. Swiss /4 6. Becoming a price addict. A L and ask for Jim or Bill company president tells about for a prompt quotation. visiting a prospective customer with the local sales representative. 0 prospect had been referred by 847_468_9300 a satisfied customer and had called the salesperson to arrange the FAX: 847-468-9319 meeting. 345 INDUSTRIAL DRIVE • SOUTH ELGIN, IL 60177 "What more could anyone ask?" Circle 33 on Rapid Response Card April, 2002 Business & Industry MAGAZINE 43 MARKETING Frank says. "That's what they want. What could be a commodity more They are willing to pay for results." than sand and gravel? But Cadman, Inc., If there is no value alignment, what is the Bellevue, Washington-based ready- left for the customer to focus on? Price, mix company, transformed various of course. Or, if we assume that price is types of sand and gravel into products all that the customer cares about, then that meet specific construction needs, we fall into the price trap. and they get a premium price for each 7. Viewing what you sell as a one. commodity. When you speak with "A brand program should be designed insurance agents about what they sell, to differentiate your cow from all other you just may hear something like this: cattle on the range. Even if all the cattle "We sell what no one wants to buy. They on the range look alike," said business only buy insurance because they have to writer Al Ries. Think about what have it." What an attitude! What a sad Morton's has done with something as way to look at the products you sell. No simple as salt or Arm &Hammer with wonder we avoid insurance agents baking soda. whenever we can. If we let what we sell If you see what you're selling as a become a commodity, we devalue it to commodity, whether it's insurance, the point that only the lowest price software or chemicals, be sure you have makes sense. the lowest price because that's the only O forway to make the sale. ��� SCREW MACHINEgo-out-and-get-it-done In business, ideas don't seem to count much. A - SEE US AT BOOTH attitude gets the votes. Yet, it should be 1 001 PRODUCTS obvious that ideas affect not only the way we think but the way we perform 5 CNC Turning Machines as well. Bad ideas, no matter how 8" Diameter 20" Long popular they may be, still produce bad results. "Quad Cities'Largest Screw Machine Facility" PRECISION SCREW •AUTOMATIC DRILLING John R. Graham is president of MACHINE PRODUCTS MACHINE Graham Communications, a market- • BROWN&SHARPE TO 25/8"RD. •SNOW TAPPING MACHINES ing services and sales consulting •WARNER&SWASEY 5-SPINDLE •SPECIAL THREADS—DLB.RD. LEAD&METRIC TO 2/n firm. Mr. Graham is the author of •SWISS TORNOS AUTO TO 716"RD. •SPECIAL SCREWS&NUTS The New Magnet Marketing, a book • DAVENPORT AUTO TO 3/4"RD. •KNOBS, KNURLED INSERTS that deals with his unique marketing •2ND OPERATION WORK •GEAR BLANKS&PIVOTS and sales concepts. •NOZZLE COMPONENTS MEMEER O2 "FAX" • FITTINGS—CONNECTORS Mr. Graham writes for a variety of BREW MACHINE PRO�� 319-391-9182 • BUSHINGS AND SPACERS publications and speaks on business, ASSOCIATION marketing and sales topics for com- Write or Call For +iii: pany and association meetings. He ;, � Prompt Action On Your il. Screw Machine Needs is the recipient of an APEX Grand Award in EDENS AUTOMATICS tacted at 40rOv Road, Quincy, M Co. Inc. 02170 (61 7-328-0069);fax 617-47i- 1504;j_graham@grahamcomm.com. P.O. Box 3646, Dept. B&I • Davenport, Iowa 52808 The company's Web site is Phone: (Area Code 319) 391-5920 www.grahamcomm.com. Circle 34 on Rapid Response Card 44 Business & Industry MAGAZINE April,2002 M � I 'ATO � ' • City of Elk -� River MEMORANDUM TO: Economic Development Authority FROM: Heidi Hall, Economic Development Assistant Ott DATE: July 8, 2002 SUBJECT: Strategic Industrial Marketing Activities Update Strategic Industrial Marketing Plan Update In May, the EDA hired Anita Duckor, of Duckor&Associates, to work with staff to update the Strategic Industrial Marketing Plan. The plan is a guide to the City's marketing efforts, which relate to the City's siting and expansion process. • Over the last two months, staff has worked with Ms. Duckor to analyze the City's competitors. This included tours of competitors'industrial parks, analysis of their product (what is offered) and how that product relates to industrial building design standards. An analysis of Elk River's own product or vision,which since 2000,has been"to be the light industrial hub for small to medium-size firms in the northwest metro region", has also taken place in order to evaluate the outcome of the 2000-2002 Strategic Industrial Marketing Plan. Ms. Duckor also conducted a mix of fourteen interviews including pending and lost clients, key accounts, advertising sponsors, and community leaders. The feedback received will be considered in the plan's update. The Marketing Committee formed in 1999 will reconvene on July 30th at City Hall from 4:00-6:OOpm. The following people were invited to attend: • Jim Barthel • Chris Carlson • Jeff Gongoll • Gary Santwire • Jim Simpson • Daryl Thompson • Dr.Alan Jensen • Dan Tveite • The Marketing Committee will provide input for the plan's update and will evaluate the effectiveness of marketing activities to date. 2002 Strategic Industrial Advertising Campaign Elk River was featured in the May 2002 issue of the MN Real Estate Journal Leasing Guide (see attached article). Ads featuring Elk River companies Cymbet, SoftPac,Tescom, and Marketech,will appear in the remaining 2002 Strategic Industrial Advertising schedule. The publication dates are as follows: July 22nd MN Real Estate Journal(MREJ) August Leasing Guide Sept. 2nd CEJ Sept. Twin Cities Business Monthly(TCBM) Oct. TCBM Nov. Leasing Guide Nov. 25 MREJ Dec. TCBM TCBM provides the City with mounted copies of Elk River TCBM ads in which staff distributes evenly to each featured ad sponsor. Thanks again to this year's ad sponsors: The Bank of Elk River, First National Financial Services, Genesis Business Centers, and • Northstar Access. Web Site The City has a new web site,www.ci.elk-river.mn.us. The entire site is still being developed,including the economic development portion. Please advise staff of any ideas you may have since each department is responsible for its own information and updates.