Posts Tagged ‘Interest’

Have you ever watched birds feed their babies in the nest?  As the parent bird swoops in, the baby birds open their beaks and the parent plops a juicy worm or insect right into junior’s gaping mouth.  The baby just sits and eats.  The parent does all the work.

I recently met some people like that:  They were college students headed for careers in medicine.  I subscribe to Science News and there were some medically-oriented articles in the current issue (new theories for brain repair, a new blood component that physicians were concerned about, etc.).  I handed the magazine to one of these young folks and said “look at this”.  I expected a reaction such as “THAT is interesting” or “Wow, how can that be?” or at least “I’ll read that later”.  But instead I got an expressionless gaze and no response at all, followed by the magazine being laid onto an adjacent table.  I asked if the articles were of interest and got a “yea, I guess” answer.  I hope my expression didn’t give me away but I was horrified: A future physician was unmoved by medical news articles that could change the profession forever.  But then I thought back and realized that this has been a common expression from this person whenever I have offered similar magazines or books: Ho hum, I might read that some other time.  But then they don’t.  Not ever.

Bizarre!

Now here is why that seems so bizarre to me:  I am an aviator.  I have been flying since 1983.  I enjoy reading, talking and thinking about all things related to aviation.  Some things interest me more than others but I at least scan EVERYTHING that crosses my path that deals with aviation: civilian, military, airplanes, pilots, radios, radars, airfoils, airspace, weather, legislation, etc.  – – – Everything – – – .  In my bedroom there are seven books partially read (five of them about flying) and about 20 magazines beside the bed (I have flagged articles that I want to copy, things I want to act on, people I want to contact about something, etc.)  I also contribute articles to flying magazines and have several in various stages of completion.  I belong to the Aircraft Owners and Pilots Association and the Experimental Aircraft Association.

I also fly young people (for free) in introductory flights every chance I get, including at fly-days sponsored by the Young Eagles organization. I also fly and maintain our corporate airplane including oil changes, engine tune-ups, minor repairs, refueling, etc.  So there are aircraft maintenance magazines everywhere in our house and in Solid Thinking’s offices and the hangar.  And we live in a residential airpark and I serve on our property owners association’s Board of Directors, so there are government regulations and county runway easement proposals laying on chairs and tables throughout the house this week.  And I am working on my next rating so there are instrument flying study plans on the kitchen table and flight-in-clouds checklists near the potty (I know, TMI).  But wait, there is more!  These aviation-related things are only one of my passions.

There’s more…

I am also a practitioner and teacher of advanced Project Management techniques.  I write and teach courses on the subject and am interested in a number of related areas: how to portray complex data in easy-to-grasp ways; ways to get engineers, scientists, program managers, marketers and other disciplines to collaborate on project teams; and ways to get Generation Y-ers, Generation X-ers and Baby Boomers to stop sniping at each other and come together on project teams.  I have just finished reading four books on that last subject and plan to write one this spring with my friend and colleague Ken Pardoe.  I have begun teaching advanced collaboration techniques in our Project Dominance courses so I have notes and articles on that topic laying all around the house.

So what?  Big deal.  Are you asking “What does that have to do with me, or with baby birds?”  Next week I’ll tell you.  And it will probably scare the crap out of you.  And if it doesn’t, THAT will scare the crap out of me!

Copyright: Solid Thinking Corp.

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Tagged as: active garage, Aviation, baby bird, Interest, Leadership, mack mckinney, passion, Project Management, Solid thinking, spoon feeding

Portfolio management is a critical activity for any business leader, be it a General Manager or a Venture Capitalist.  This article offers a case study on portfolio management with a focus on value-net¹ and the economic value of portfolio companies. The intent is to provide an analysis of the portfolio that can serve as the basis for growth strategy.

The Value-Net¹:

The success of any business initiative depends on the value delivered to its customers. While immediate customers are important for near-term growth, the long-term viability of a company hinges on the value delivered to eventual customers, i.e. customer’s customer.  Hence a view of how you serve your eventual customers is important in portfolio management. Several business entities, called value-net¹ partners, are involved in the process of delivering value to end customers.

The Portfolio:

Rajesh Setty is a successful CEO and now a venture capitalist with a growing portfolio of companies.

Following is a brief description of 3 of his portfolio companies:

• ContentKing²:

An innovative approach to solving the content marketing challenges. Content such as white paper and ebooks are better managed to ensure that it is efficiently delivered to the target audience. Since the company is still in a stealth mode, a fictitious name, ContentKing, is used.

• Jiffle³ :

Jiffle brings efficiency and intelligence to event marketing activities.  It offers a simple and intuitive web portal for event managers to schedule and manage client engagements at events.  In addition, customers can generate various reports on the efficacy of their participation at various events by product line, region, etc.

• iCharts⁴ :

iCharts business service allows one to easily build sophisticated, searchable online charts. iCharts makes it easy for customers, journalists and others to find, reuse and republish your data — helping proliferation of your data across the web.

Analysis of the above portfolio companies highlighted a common theme in their value proposition. There were opportunities for collaboration among portfolio companies and also opportunities to expand the value range of services.

A common theme among the 3 portfolio companies is that their immediate customers are demand generation teams.  Hence these 3 portfolio companies influence the adoption of product/service by the eventual customers. However they are at different stages of the AIDA – Marketing model⁵.

AIDA – Model ⁵:

There are 4 stages in the AIDA model – Awareness, Interest, Desire and Action.  A customer first has to be aware of the existence of the product then be interested in learning more about the product, then have the desire/need to buy the product and eventually be convinced that it is the right product in order to buy it. Support is added as the last stage by some marketing professionals. Different tools, tactics and activities are required to be effective at each of the stages.

The dynamics of each of the stages in the AIDA model are different. As you progress from Awareness to Action, the number leads decreases while the cost per lead increases. The following is an illustration of this dynamics. The numbers in figure 1 and 2 illustrate the relative scales. The actual value varies by product and industry.

Figure 1

Mapping the Portfolio on the AIDA Model:

The 3 portfolio companies are mapped on the AIDA model in figure 2. The immediate target customers are listed below the portfolio company. Finally, the Assets/Capabilities of the VC, Rajesh Setty, is also mapped to highlight the investor’s affinity to their domain expertise.

iCharts⁴ is at the cusp between Awareness and Interest. The interactive charts not only build awareness to a company’s offering but also generate interest in the offering by providing interactive charts that offer more details. ContentKing² deals with whitepapers and eBooks, hence heavily in the interest phase. Jiffle³ is placed in the Decision stage but can play well into the action phase. The meetings at conferences and tradeshows influence the decision and at time deals are closed at these meetings.

Figure 2

The Conclusion:

The mapping in Figure 2 provides a bird’s eye view of the strategic position of the portfolio companies in the AIDA model. This can serve as the foundation to develop strategic growth initiatives for the individual companies as well as help VCs manage their portfolio companies.

Considering the price per lead at each stage of the AIDA model, one can get a sense of the valuation as well as revenue potential of the portfolio companies. The portfolio manger can evaluate collaboration opportunities among the portfolio companies and also opportunities to invest in new companies.

The individual portfolio companies can brainstorm whether it makes strategic sense to expand along the AIDA model. It also forces the portfolio companies to think beyond their immediate customers by engaging in initiatives and partnerships to help product/services companies in their pursuit to close sales.

Note:

1. Value Net:
   • http://en.wikipedia.org/wiki/Value_network
   • Brandenburger, A. M. and B. J. Nalebuff. “The Right Game: Use Game Theory to Shape Strategy,” Harvard Business Review, July – August 1995
2. ContentKing: http://www.rajeshsetty.com (watch the URL for announcements)
3. Jiffle: http://www.jifflenow.com
4. iCharts: http://www.ichartsbusiness.com
5. AIDA Model:  http://en.wikipedia.org/wiki/AIDA_(marketing)

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Tagged as: Action, active garage, ADIA Model, AIDA, awareness, case study, content king, cost, customers, Desire, ibm, icharts, industry, Interest, jiffle, mapping, portfolio management, product, product adoption cycle, Rajesh Setty, sanjai marimadaiah, value proposition, value-net

Many of us have been to a vacation time share presentation to get a free vacation, but with the clear intention of not purchasing it… and admittedly, have found ourselves on the edge of the purchasing decision! They did not close the deal, but did come close… very close… and for that, I have to give them credit – their sales process is very good. It is based on the centuries old four stage AIDA sales sequence:

1. Attention

2. Interest

3. Desire

4. Action

The concept of AIDA comes from the perception of a buyer going through stages of first becoming aware or Attentive to a proposed product or service, then, if it is relevant, it provokes Interest and willingness of the buyer to learn more about it. If the buyer perceives it to be valuable and unique or special, the state of Desire develops, and most likely leads the buyer to take Action to purchase or accept the offer.

In essence, the classical AIDA model is: Get ATTENTION – Create INTEREST – Make it DESIRABLE – ACT to Close the deal.

This looks logical and simple, but does not always work as intended. The main breakdown usually occurs in the transition from (stage 3) Desire to (stage 4) Action. What makes this transition difficult is the inception of the “decision making point” that may often change the dynamics of the selling process as the reality of the consequences of the buying decision overpowers the desire to acquire.

Successful sales people differ from those who do not close effectively in their ability to keep the energy and emotional levels of the desire stage high through the transition stage to close the deal often at or over the borderline of ethical norms by hiding or minimizing the impact of consequences or risks and thus deceiving their clients.

Let’s take an example from a familiar domain – you are trying to convince your child to complete the homework. You got their Attention – that is relatively easy (whatever methods you might be employing) – now your child is sitting in front of you and you are working on getting them interested to do the work. You proceed to talk about the benefits of education trying to build up the Desire (to get to a reputed ivy league school rather then working in the local fast food chain) … and then you go for the kill and at that very moment the whole structure collapses as your kid starts crying as they realize they have to give up TV or playing with the kids outside.

So, what just happened? … The transition from Interest/Desire stage to Action was not prepared – there was no COMFORT zone in the transition and all high emotional content achieved during first three stages simply collapsed.

This transitional issue became obvious to many in recent years and lead to the modification of the century old process of AIDA to what is now known as AIDCA. The “C” stands for the Comfort stage. This stage bridges the gap between the Decision making stage and the Action stage; the very gap that cause the breakdown we observed in the earlier AIDA process. Helping the customer reach this comfort zone is essential in the modern sales/negotiation process.

The old notion: “make me an offer I can’t refuse” is still very powerful in leveraging this comfort, but it is not always possible. “Make me an offer that I can comfortably accept” becomes more realistic. Both require one important piece of information – what is important, the “deal makers” and the “deal breakers”, the risks and the benefits perceived by the buyer, not the seller. Obtaining this information becomes critically important in order to create the comfort zone and close the deal and that requires a discussion rather than a monologue.

Sales presentation becomes Sales conversation.

The Vacation time share industry developed a great approach to the creation of the comfort zone. After showing you all the nice places you can go and most beautiful spots you can reach – they turn the table and start asking questions like:

how you spent your vacation time in the past?

what do you want to do in the future?

what are your key requirements in regards to price, activities, types of destinations etc?

All this with the purpose to find out and make you feel comfortable with what they have to offer and your decision to purchase.

There are three distinct stages in the process:

1. Development of Comfort zone:

(i) Early in the Interest-Desire stages, start the interactive exchange with the purpose of identifying and developing the comfort zone structure for your client.

(ii) Do not assume anything as no two customers are exactly the same.

(iii) No previous experience is applicable (even with the same individual).

(iv) Ask questions and be (not just look) sincere.

2. Reaching the Comfort state:

(i) When you are ready, get confirmation from the client about what you just learned of their interest and their comfort/discomfort with the decision to act.

(ii) Talk openly about pros and cons and risks as you think they perceive it.

(iii) Summarize and ask for confirmation or modifications to this understanding.

3. Leveraging Comfort:

(i) Using what you just learned in the process add something to your offering that makes your client decision making process easier and your offer more acceptable.

(ii) Extend the warranty period, give additional guarantees, add refund benefits, etc – use whatever you discovered is important for this client to customize the offer, instead of providing them a generic prepackaged offer everybody gets.

Now, let’s return to the example with your kid. After you told them about the choices of Harvard vs. McDonald and the importance of doing their homework, engage them in a discussion and ask questions of what they feel is important for them and where doing homework belongs in the level of importance. Ask questions of what would make them comfortable to complete homework before watching their favorite TV show. You may learn that taping their show and allowing them to watch it later may make the whole difference as that introduces the Comfort stage for them. You may then “leverage” this comfort further by offering to DVR the entire show every day and letting them to watch it any time they want after their homework is done.

Here are a few questions that will help you in your thinking on the development of Comfort zone:

(i) What do you like about the product/service/offering?

(ii) How do you see the benefits, if you make the decision?

(iii) Where do you see the risks and difficulties?

(iv) What would make you feel good and enjoy your purchase a year from now?

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Yakov Soloveychik is a business advisor, mentor and a personal coach to CEO’s and business owners. Yakov’s professional and entrepreneurial career includes VP,  COO, CEO positions and service on board of directors with a number of technology based companies in Los Angeles and Silicon Valley

Tagged as: Action, active garage, AIDA, AIDCA, Attention, Comfort, comfort zone, conversation, Desire, Interest, marketing, negotiation, presentation, sales, timeshare, Yakov Soloveychik