Value Creation

An effective business starts with a vision of what it wants to become and ends with value creation. Competing in a competitive marketplace is difficult, and to survive and prosper long term, a company must develop and use its capabilities to create, real, sustainable, superior value for its customers and society as a whole. It requires a company to anticipate and profitably satisfy customer needs.

Let’s take a look at an example. How many of you own an Apple IPod? I would venture to guess that approximately 1 in 10 of you own an IPOD. (I recently saw a statistic that 11% of Americans own an IPod). Our family currently has three IPods, and we love them. How did Apple come up with this cool gadget? Did someone go up to Apple and tell them that they wanted Apple to develop a sleek, stylish, device that could store digital music and video files, and they would like the device to be able to sync up to a website that allows users to easily download millions of songs? Probably not. So how did they come up with the concept?

Apple understood their customer’s wants and needs. This understanding came from rich customer relationships that had been developed through years of product development, testing, and feedback. I would assume that Apple spends a large amount of money surveying customers and potential customers to get a clearer picture of their true wants and needs. Apple probably also has a clear understanding of its own internal capabilities. With this in mind, they anticipated what their customers would want, and developed a product that profitably satisfies these needs and wants. That’s value creation.

Do we have examples of anticipating and profitably satisfying customer needs? We do. Recently the sales team closed a large sale. Several months earlier, this account had been identified as a large sales opportunity. Many team members were involved in this particular sales process, and their efforts were rewarded with the acquisition of this account’s business. During their last monthly meeting, the sales team had an opportunity to analyze their performance on this sale. The key question that was raised was, “What led to the successful outcome of this particular sales process?” Here are the key takeaways from this analysis.

Takeaway 1: We need to understand the customer needs.

This prospect had similar needs to many other large, regional consumers of fuel, lubricants, and propane. These key needs can be summarized as follows:

• The prospect was focused on cost saving solution.
• The prospect wanted to consolidate suppliers as much as possible.
• The prospect expected its vendors to package their proposals in a concise and professional way.
• The prospect was open to new ideas, and was hungry for easy to understand market- based information.
  

Takeaway 2: We need to understand our strengths.


Customers are smart, and they can see through half-baked promises. Fortunately, for R.E. Powell, many of our strengths aligned with this prospects needs. These strengths include: A team of experienced professionals that could audit their operations and help them identify cost saving solutions.

• A supplier that can supply products to a large geographical area, so as to limit the total number of suppliers that they need to deal with.
• A supplier that can provide easy to understand, market-based information that can be used to make informed buying decisions.
• A supplier that can package their findings and solutions into a concise and professional looking proposal.
  

Takeaway 3: Prepare before the game.

By developing strong relationships with many of our large, regional customers, we knew that these type of customers have specific needs that need to be addressed. This knowledge had led us to adapt our strengths to meet these needs. Over the last couple of years we had made the following adjustments:

• Added new sales professionals to our team that are experts in their specific field.
• Expanded our distribution areas.
• Improved our ability to gather and disseminate market-based information.
• Improved our proposal writing and presentation skills.

We had anticipated and profitably satisfied the customer’s needs. That’s Value Creation.

So is there a standardized process for value creation? That’s a great question, and I will address that in my next blog.

I'd love to know your thoughts? tony@repowell.net

Tony

www.repowell.net

Challenges

I was recently reading an article about a tour guide named Chen Yu, who works at Taiwan’s Yushan National Park. When Chen asks his guests what they would like to see, they almost all say that they want go to the top of Yushan (Jade Mountain), which is the highest peak in Northeast Asia.

Chen loves the beauty and majesty of Yushan, but over the years he’s learned that the spectacular views from the top of Yushan are appreciated most by those that have experienced the deep gorges and valleys that lie far below the summit of Yushan. According to Chen, “to appreciate the height, you must experience the bottom. You can’t appreciate the end without understanding the process.”

What a great analogy for life. When we persevere through the challenging times, we grow. We cannot rise up out of the world, without undergoing uncomfortable, sometimes painful experiences.

In a recent conversation with one of our mangers, we discussed the struggles that his team was experiencing. This manager’s team, like many of the teams within our company, had experienced a very challenging year in 2009. Goals were not met, tough personnel changes had taken place, and the prospect of more challenges loomed on the horizon. During our conversation I brought up the example of American Idol. Most of you are probably familiar with this popular singing show, which has attracted millions of fans. Contestants who try out for American Idol are required to regularly sing on live TV, and then they are subjected to tough criticism and feedback from the show’s panel of three judges. One of the three judges, Simon Cowell, has become infamous for his candid, direct, and oftentimes blistering critiques of the show’s contestants.

If you watch the full season of American Idol, you will see a very interesting thing take place. As the contestants move through the process of performing and being judged, some of the singers go through an amazing transformation. These particular singers use the feedback and criticism they receive from the judges, and grow from it. They come back to their next performance improved, and with even more determination to succeed. They rise to challenge. The most interesting thing is that many times the singers who become the real stars of the show, did not start the season as the best singers. However, their passion and drive pushed them through the challenging times, and through this process they significantly raise their singing abilities. Through this process they become true singing stars.

How do we challenge ourselves at work?
Do we have the courage to give candid feedback to our team members and teammates?
What do we do with the feedback that we receive from our manager or teammates?
Do we grow from the criticism and feedback that we receive?

As we start off the new year, I challenge each of us to be more candid and direct. I also challenge each of us to learn and grow from the feedback we receive from our teammates.

I'd love to know your thoughts? tony@repowell.net


Tony

www.repowell.net

Candor

Recently I attended a meeting with one of our teams. This particular team had recently experienced a series of significant failures. The team was frustrated, and you could sense that many members of the team had feelings that they wanted to get off their chest. During the two hour meeting, the failures were analyzed, and team members took accountability for their roles in these failures. The team members spoke candidly about their performance, and the performance of their fellow team members.

Candor is defined as the quality of being honest and straightforward in attitude and speech. It sounds so simple, but in fact most teams and organizations rarely bring candor to the table. Fortunately, this team had learned that no one benefits when truthfulness and integrity are covered up. No one grows when weaknesses and failures are tolerated. Many teams pronounce that “they want their team members to provide honest feedback”, or that “this is a safe place to express concerns”, but these words rarely bring candor.

A company is simply a collection of people who create customer value together. Employees, from the janitor to the CEO, need to trust each other to grow and fulfill the role they have been invited to play. Having complete faith in each other is vital and candor is an important element in achieving this.

Let's analyze our performance, and the performance of our teams. Team managers should be creating an environment where all team members feel safe to be candid about their performance, the performance of their team members, and the performance of their manager.

Once a team or organization becomes candid, communication accelerates and performance dramatically improves. This always happens.

I've love to know your thoughts. tony@repowell.net

Tony

www.repowell.net

Imagine If

Last week I had the opportunity to attend some seminars that were put on by the University of Washington’s Business and Economic Development Center. At one of the seminars we had the opportunity to listen to a panel that included a world renowned economist, a local Seattle advertising executive, and a marketing communications expert. These panelists brought up several great points. When it was the economists time to speak he showed us on a graph how this economic recession was following a similar path to previous recessions. Albeit, this recession was much deeper and longer than any other recession since the Great Depression. He proved to the audience that all economic signals are indicating that this recession bottomed a few months ago, and based on the past history of other recessions, the country will emerge out of this recession in a few short months. This was some great news, but many in the audience commented that there were still going to be very challenging times in the months ahead.

After the economist spoke, the questions from the audience seemed to turn to what could businesses do to prepare themselves for the future. The advertising executive made a comment that really caught my attention. He said that we’ve entered a “New Normal”, where the consumer’s psyche has changed. The consumer, whether it is an individual, household, or business, is seeking after Value. In his opinion, consumers are spending more time than ever evaluating their purchase decisions. They do not want to waste their money. Those companies that can find out what consumers Value, and actually create value for their customers, will be the true long-term winners. He reiterated that you can’t assume you know what the consumer values. You must engage your customers and find out what is truly important to them. When you know what the customer values, you can then “Frame the Discussion” with your customers and prospective customers. When we engage our customers and sales prospects, we need to turn the discussion to “Imagine if…..”.

Let me give you a couple of examples.

Example 1
We have a sales prospect that says “There’s no real difference between any of the area’s fuel suppliers. Fuel is fuel, and all you distributors sell fuel for about the same price”. Our skilled salesperson, realizes that she has to re-frame the discussion, so she says, “Imagine if your supplier could provide accurate short-term predictions on fuel prices, and could help you purchase fuel at the right time. Is this something that your current supplier does for you?” The conversation has now turned from price, to value. If the prospect wants to be able to make informed decisions on when to fill up his tanks, he will value the fact that R.E. Powell has an on-staff fuel market analyst.

Example 2
A customer says that we need to lower our price on our lubricants because the competition is beating us by 10 cents per gallon. Our well trained Territory Manager asks the customer what other value added services does that competitor provide. The Territory Manager then follows that up by saying “Imagine if your supplier does not perform an in-depth quarterly review like R.E. Powell does, how will you stay on top of the constant changes that take place with your lubricants? In the near future you could be using products that no longer meet your unique needs”

If we as a company look around, we will find that we are surrounded by numerous “Imagine Ifs”. They include

Imagine if your fuel supplier could assist you in putting together a fuel purchasing strategy and budget for 2010!

Imagine if your fuel supplier put on an annual Dealer Conference and Trade Show that included industry leading training!

Imagine if your lubricant supplier performed regular facility audits to ensure that you are using the best products for your unique needs!

Imagine if your territory manager met with you once a quarter to assist you in finding ways to optimize your purchases, and ultimately your business!

Imagine if your delivery driver showed up to your place of business well groomed, in a nice uniform, and in a nice piece of equipment!

Imagine if you could always count on your distributor to follow through on what they said they were going to do!

If you can think of any “Imagine Ifs” that we should be sharing with our customers and sales prospects, please let me know.

I'd love to know your thoughts. tony@repowell.net


Tony

www.repowell.net

Strategic Positioning

In my email last week I mentioned that we were going to hold a series of informational seminars throughout the state. In fact, we had nine seminars which were held in Pasco, Yakima, Moses Lake, Prosser, Alderdale, Spokane, Hermiston, and Walla Walla. These seminars were attended by both existing customers and sales prospects. I want to give the C & I Sales Team a big pat on the back. They did an excellent job in coordinating these meetings. Tina Hampton was our presenter at each of these meetings, and I want to thank Tina for the effort she put forth to make sure that these meetings were a big success.

As a company we are working hard to position ourselves as the experts in Fuel, Lubricant, and Propane Distribution. Our mission is to create value for our customers by delivering the right product, at the right place, and right price, every time. Last week’s meetings were an opportunity to show our customers and our competitor’s customers that we are serious about our Mission. We know that we are best distributor of Fuel, Lubricants, and Propane in the Pacific Northwest, and now it’s time to let everyone else know.

Tony

www.repowell.net

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