Sales & Marketing: Revitalizing the Value Proposition
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1 Career track Three: Marketing Sales & Marketing: Revitalizing the Value Proposition Keith O Brien Vice President, Global Research, Growth Team Membership Frost & Sullivan Keith.OBrien@frost.com
2 Profiled Best Practice Company Firm: Industry: Headquarters: Geographic Footprint: Ownership: Revenue (2010): Kronos Software Services and Applications Chelmsford, Massachusetts, United States Global Private ~$750 million USD 5
3 Growth Challenge Problem: Slowing product growth forces Kronos marketing and sales organizations to create and deliver a differentiated value proposition. 6
4 Kronos marketing leadership works with Sales to revitalize the value proposition and create differentiated sales messages Creating and Embedding a New Value Proposition Revisit Existing Value Proposition Create New Value Proposition Develop Sales Messages Drive Sales Force Adoption Objective Conduct a baseline assessment of the current value proposition s strengths and weaknesses Objective Develop differentiated value proposition Objective Translate the value proposition into sales force messaging Objective Achieve 100% adoption of new messaging by sales force Activities Perform market assessment Conduct brand positioning workshop Run customer/prospect focus groups Activities Conduct Affinity Diagramming exercise to identify customers Critical Business Issues (CBIs) Pinpoint how Kronos uniquely addresses these CBIs and translate into a value proposition Activities Conduct Power Messaging Workshop with sales and marketing leadership to update messaging and techniques Activities Conduct Power Messaging Workshops with entire sales force Establish Sales and Marketing Leadership Councils by vertical market Output Market assessment Focus group findings Governing Brand Idea (GBI) Output Critical Business Issues (CBIs) and key differentiators New value proposition Foundational Message Guide (FMG) Output New messaging techniques Portfolio of customizable messages Output Sales force adoption of customizable messages and techniques Industry-specific Sales and Marketing Leadership Councils to drive ongoing adoption 7
5 Pressure-test market understanding and value proposition Situation Market Assessment Management believed Kronos was the market leader, but the company s product revenue growth was flat, despite category growth Commissioned a third-party assessment of the workforce management (WFM) market Objective Capture the current state of the workforce management category. Findings 3T3 wo customer segments exist: -- Ease-of-use buyers who value straightforward implementation with low cost of ownership (50%) -- Functionality users who value advanced features (50%) Kronos is the market leader, but growing slower than the market Kronos lacks a compelling category positioning Need to revise brand positioning to appeal to both segments Brand Positioning Workshop Participants Senior sales and marketing executives (one-day workshop) Objectives Audit existing marketing messages and collateral Develop preliminary Governing Brand Ideas (GBIs) to be tested in focus groups Preliminary Governing Brand Ideas (GBI) The experience to know it s complex. The expertise to simplify it. Workforce management doesn t have to be so hard. Simple solutions that work hard. 8
6 Conduct focus groups to gather insights on the most effective brand positioning Focus Groups Objective: Validate Market Assessment findings Sample Questions What are your top-three needs addressed by a WFM solution? On a scale of 1 to 5, how important is fast payback to you? Results Users are frustrated with the complexity of WFM solutions Prospects who value ease-of use WFM solutions are currently underserved Objective: Assess Kronos competitive standing Sample Questions What is Kronos personality? For what type of solution would you call ADP? Results Awareness and consideration rates are lower than expected Existing value proposition around time and attendance benefits is undifferentiated Perception of market strengths does not align with customer/ prospect perceptions Objective: Identify the most convincing GBIs Sample Questions Which positioning statement do you find most compelling? Would the statement entice you to consider Kronos? Results Workforce management doesn t have to be so hard is an appealing brand position: -- The statement defines the category and appeals equally to functionality and ease-of-use buyers Action Steps Simplify the customer experience by modifying the user interface Expand brand positioning to accommodate ease of use and highfunctionality customer segments Action Steps Develop a differentiated value proposition Work with sales leadership to embed new value proposition with the sales force Action Steps Leverage the brand positioning in marketing Create internal documents and perform training to align employees on the new positioning 9
7 Develop a customer-focused, differentiated value proposition Developing the Value Proposition Using the Governing Brand Idea as the foundation, Marketing leaders employ the Affinity Diagram to identify three critical customer needs that should be addressed by a workforce management (WFM) solution. Marketing leaders identify how Kronos can uniquely address Critical Business Issues. Create Affinity Diagram Workforce management doesn't have to be so hard! CMO VP, Corporate Marketing VP, Enterprise Marketing Identify Critical Business Issues (CBIs) CBIs are core customer needs that can be addressed by workforce management solutions. Control labor costs Minimize compliance risk Improve workforce productivity Develop Kronos Key Differentiators 33Kronos provides complete automation 33Kronos delivers highquality information 33Kronos is easy to own Articulate Value Proposition Kronos is the global leader in workforce management solutions that enable organizations to: Control labor costs Minimize compliance risk Improve workforce productivity 10
8 Create a Foundational Messaging Guide to provide a companywide reference point for the new value proposition Foundational Messaging Guide (FMG) The FMG: An Overview The FMG is designed to align all employees on Kronos value proposition and is updated regularly The FMG demonstrates how Kronos addresses the two core questions listed below Why do customers purchase workforce management? Answer: the three Critical Business Issues (CBIs) Why purchase a Kronos workforce management solution? Answer: Kronos key differentiators around each CBI Foundational Messaging Guide Contents Why Workforce Management?.. 3 CBI #1 Controlling Labor Costs.. 4 CBI #2 Minimizing Compliance Risk CBI #3 improving Workforce Productivity Differentiator #1: Complete Automation Differentiator #2: High-Quality Information Differentiator #3: Easy To Own FMG Objectives Create common understanding of the value proposition Drive alignment on role of WFM, core customer needs, and Kronos solutions Supply the building blocks for differentiated sales messages Provide sales messages to address critical business issues Develop selling techniques to be used with prospects In Summary FMG s ability to attain objective The FMG captures the value proposition in a written format; however, it does not enable Sales to articulate the value proposition verbally. 11
9 Translate the value proposition into effective sales messaging Sales Force Adoption Challenges Sales Messaging Techniques Bringing differentiators to life through customer messages The sales force needs to believe in the messages Not Invented Here syndrome Power Messaging Workshop Workshop Participants Marketing leadership, Sales leadership, Key sales representatives, and Product Management Purpose Translate differentiators into messages and delivery techniques for Sales Build sales and marketing consensus on messages and techniques Message Attributes Leverages customer stories Appeals to multiple learning styles (visual, auditory, kinesthetic) Customers can relate to the message Impact is easily understood and memorable Number Plays Messaging Techniques Stories with Contrast Big Picture 3D Props Critical Inputs Why customers buy (CBIs) and why they buy from Kronos (differentiators) Preliminary success stories that demonstrate how Kronos uniquely meets customer needs 12
10 Develop easy-to-customize messaging techniques How to Create a Story with Contrast Retail & Hospitality Customer Example Squeezing More Out of Scheduling The story must be relevant Jamba Juice Business Company Size Key Products Quick-serve restaurant Smoothies 730 locations Operates in 47 states Timekeeping, forecasting, scheduling Results Achieved The $19.7M decrease in labor cost was primarily attributed to optimization of labor scheduling, leading to more efficient labor management Annual Report 2008 Labor = 36% of sales 2009 Labor = 34% of sales Highlight pertinent results It s a story, so limit data Emphasize the benefits of choosing Kronos Before Kronos Manual forecasting and scheduling resulting in: -- Gaps in coverage -- Overstaffing Inability to react to changing conditions, especially the weather No visibility into store operations After Kronos Automated scheduling Accurate baseline forecasts Quick reaction to weather conditions: -- Overcast and cold call people off -- Sunny and hot staff up Companywide scheduling and regulatory compliance Make the customer the hero 13
11 Drive sales force adoption by directly addressing barriers to adoption Power Messaging Workshop with Kronos Sales Force Workshop Overview Secure Buy-In on the CBIs and Differentiators Create Ownership of the Techniques Put the Techniques into Practice Attendees: Sales force (450 participants, in groups of 25 30) Adoption Barrier: Skepticism Adoption Barrier: Ownership Adoption Barrier: Confidence Duration: Two Days Pre-work: Complete Power Messaging elearning module Bring examples of customer challenges successfully addressed by Kronos differentiators Overcoming the Barrier: The facilitator leads a group exercise requiring participants to wrestle with the new messaging: Discuss the CBIs and differentiators candidly and compare them to existing messages Prove that the differentiators are unique compared to competitors offerings Emphasize positive engagement with the differentiators Overcoming the Barrier: The facilitator helps participants tailor their own success stories for the new messaging techniques by: Encouraging participants to use multiple messaging techniques and select the ones they prefer Overcoming the Barrier: The facilitator leads role-play sessions to practice message delivery and drive behavior change: Participants present their stories using the new techniques and receive peer and facilitator advice Participants build their confidence in the messages and techniques 14
12 Establish Sales and Marketing Leadership Councils to drive ongoing application of the value proposition Sales and Marketing Leadership Council Charter Sales and Marketing Leadership Council Purpose Run operations reviews of each vertical market Build and maintain trust and transparency Responsibilities Monitor the state of the business Examine sales and marketing effectiveness Meeting Schedule Monthly for four hours Manufacturing Marketing Attendees: Director of Marketing; VP, Enterprise Marketing Value Proposition Support: Develop Stories with Contrast for Sales Provide presentation templates Healthcare Sales Attendees: Area VP, Sales; Director of Sales Management Value Proposition Support: Conduct follow on training Provide customer success stories to marketing Service & Distribution Retail & Hospitality Product Attendees: Director of Product Management Value Proposition Support: Align the product roadmap Ensure development plans address customer issues Public Sector Services Attendees: Director of Services Value Proposition Support: Train services staff Ensure the customer experience reflects the promised value Example: Spot-check sales presentations for consistency with brand messaging Example: Video mock sales presentations using new messaging techniques and provide feedback Example: Use customer review panels to confirm innovations reflect the voice of the customer Example: Certify services staff so they communicate the same value proposition to customers 15
13 Business Results Percentage of Sales Force Using Power Messaging Techniques (Survey of Kronos Sales Force) 8% Somewhat Consistently 21% Consistently Impact of Power Messaging Techniques on Closing Business (Survey of Kronos Sales Force) Some Impact 4% 16% Significant Impact Very Consistently 71% High Impact 80% Annual Revenue and EBITA* Revenue ($ Millions) $820 $800 $780 $760 $740 $720 $700 $680 $660 $640 $620 $600 FY 2008 FY 2009 FY 2010 FY 2011 Projected $250 $200 $150 $100 $50 $0 EBITA ($ Millions) Revenue EBITA * EBITA is earnings before interest, taxation, and amortization. 16
14 GTM Members can access the full 14-page Best Practice Guidebook growth team membership growth team membership Download the complete guidebook summary Revisit Existing Value Best Practice Guidebook Firm: Kronos Proposition at your Growth Team Membership client portal. The Guidebook includes: Full content and guidance Key Lessons Learned Tools and Resources Section Best Practice Guidebook best practice guidebook Kronos marketing leadership works with Sales to revitalize key takeaway: the value proposition Pressure-test and your create market differentiated understanding sales messages and value proposition Sales & Marketing: Revitalizing the Value Proposition Marketing commissions a market assessment Creating and to Embedding gain a New Value Proposition perspective on the category and Kronos position within it Market Assessment Create New Value Proposition Develop Sales Messages growth team membership best practice guidebook and then conducts a workshop to craft new brand positioning Brand Positioning Workshop Drive Sales Force Adoption Industry: Software Services and Applications Participants Situation Headquarters: Chelmsford, Massachusetts, United States Senior sales and marketing executives participate in a one-day workshop Geographic Footprint: Kronos Global management believed the firm was the market Objectives Ownership: Privateleader, but product revenue growth was flat despite category growth. Therefore, Kronos commissioned a Audit existing marketing messages and collateral to Revenue (2010): ~$750 third-party million assessment USD of the workforce management determine extent of competing messages and identify steps Objective market. Objective Objective to rectify Objective Conduct a baseline assessment Develop differentiated value Translate the value proposition Develop preliminary into Governing Achieve 100% Brand adoption Ideas (GBI) of to new Problem: of the current value Objective proposition s proposition Resources sales force Required: messaging be tested in focus groups. messaging The GBI by will sales serve force as the Slowing strengths product and growth weaknesses forces Kronos marketing and sales organizations Marketing leadership (CMO overarching and direct brand positioning reports) to for lead a new the value initiative proposition. to create and deliver Capture a differentiated the current value state of proposition. and engage sales leadership the workforce management The workshop employs three criteria for the GBI: category by analyzing: A branding and messaging 1. It conveys agency Kronos to run understanding focus groups Solution: of the workforce Market size A consulting firm to train management the sales category force to deliver differentiated Sales Activities and Marketing collaborate to: Competitive landscape Activities customer Activities messages 2. It is simple and directactivities Evaluate Perform the market existing Customer assessment value proposition segments Conduct Affinity Diagramming Conduct Power Messaging 3. It reflects Kronos ability Conduct to help doesn t Power over-promise Messaging Create Conduct a revised brand value Kronos positioning proposition and promote brand awareness and exercise it companywide brand associations to identify customers Applicability Workshop of Best with Practice sales and to Executive Functions: Workshops with entire sales through workshop a Foundational Messaging Guide Purchase consideration factors Critical for Kronos Business Issues (CBIs) marketing Function leadership to update Applicability force Preliminary Governing Brand Ideas (GBI) Translate Run customer/prospect the value proposition focus into compelling Pinpoint sales messages how Kronos Need to Marketing messaging and techniques revise brand Establish Sales and Marketing Encourage groups adoption Findings of new messages and delivery uniquely techniques addresses by these CBIs positioning to appeal Leadership Councils by vertical Sales Leadership sales force and translate into a value to both segments The experience to market 3Two customer segments exist: proposition know it s complex. The Business Results: expertise to simplify it. - Ease-of-use buyers who value straightforward Since 2008, Earnings Before implementation Interest, with Taxation, low cost and of ownership Amortization (50%) (EBITA) Outputincreased 36% - Functionality users that Output value advanced Output Workforce Output 92% Market of Kronos assessment sales force features consistently (50%) use the Critical new Business customer Issues (CBIs) New messaging techniques management Sales doesn t force adoption of messages Kronos is the market leader, and but growing key differentiators slower than have to be customizable so hard. Focus group findings Portfolio of customizable messages and the market Governing Brand Idea (GBI) New value proposition messages techniques Kronos lacks a compelling category positioning: Foundational Message Guide Industry-specific Simple solutions Sales that and - Lower than expected awareness (FMG) and Marketing work hard. Leadership Councils consideration rates to drive ongoing adoption - Fractured and diluted brand messaging Source: Kronos; Source: Kronos; 17
15 Register for a webinar with Charles DeWitt (Kronos Inc.) and Tim Riesterer (Corporate Visions) Ask the Thought Leader Webinar Sales & Marketing: Revitalizing the Value Proposition Tuesday, 27 September :00 ET (Duration: One Hour) REGISTER for Free at Charles DeWitt Tim Riesterer The webcast will feature: A best practice case study that shows how Kronos Marketing and Sales developed and delivered effectively a differentiated value proposition Key lessons learned and Q&A with Charles DeWitt, VP Enterprise Marketing and Tim Riesterer, CMO 18
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