Warning Signs in Sales

Warning Signs in Sales

Warning Signs in Sales

The cavemen used signs as communication tools when there were no other means to pass on messages. As time went by, signs have lost its significance and now we use languages instead. With the evolution of language, people have lost the ability to read signals even when signs convey rich meaning. Tribal people who have stubbornly refused to integrate into the civilized world still use signs to communicate to others.

To a caveman, signals may be a powerful means of communication. But in today’s sales parlance it is a cue that conveys information that is unobservable from a sender to recipient. Sales management is all about signaling that ultimately leads to increased revenue. Managers design campaigns through the filter of signaling, a process of sending messages with the objective of influencing purchasing behaviors. Done correctly, this can lead to the desired amount of transactional sales. On the downside, market perception may turn out to be unfavorable.

A signal can mean different things to different users (Spence, 1974). When sales executives use signaling, test the waters by experimenting it with a smaller subset of the market. This will enable them to contain rapidly any undesirable consequences and thus manage it appropriately.

When not to use signaling

However, at times, there are costs involved in marketing signaling. It may result in product line cannibalization whereby customers wait for the signaled action and delay purchasing the existing product. Or circumstances beyond the sender’s control may affect the timely delivery of preannounced product or features of it as promised. Similarly, a price cut could be the result of excess inventory or product elimination. So, it would be in the best interest of all to not engage in price war that would dilute profit.

Sign language used by companies

Price signaling raised turbine generator profit/sales ratios in the 1950s. In 1992 Ford announced a 6% price increase to signal not to start a costly war for market share.

Service firms

Firms that sell intangible products may indicate their high value through prestigious addresses, fancy club memberships, office décor, etc. Some companies hint to the customers their willingness to work around customer needs. They do it through differential pricing, increasing staff count for peak times and by providing complimentary services.


Airlines are notorious for undercutting fares on those routes that are lucrative to their competitors in a bid to undermine the best efforts of their rivals. In such cases, if the undercutting of fares is done to put a spanner in the works then the rates are brought up to the normal level as soon as the objective has been achieved even before some of the travel agents have found out.


Firms pay dividends to its shareholders as a sign of strength signaling to the market that there is no need to hoard cash. Some investors look for a company’s Corporate Social Responsibility initiatives to gauge the health of the enterprise. Such companies use CSR to signal the appropriate messages.


Restaurants open up in an up-market locale with high rents to signal to the patrons of its five-star status as well as to advertise its good food. Warranties and guarantees are other examples marketers use to show the credibility of the quality of the product. They offer insurance against faulty products to potential buyers. Longer the warranty, higher the quality.

Marketing signaling is also messages sent to other companies within the industry either to convey to or to gain information from competitors. Companies selectively leak information to manipulate the opponent’s choice of actions. Employees find press announcements to be more credible than internal communications.

Types of signaling

Kirmani and Rao (2000) distinguishes between two types of signaling based on the financial consequences. They are:

  • Default-independent signals, where companies incur financial loss, such as heavy advertising costs or fixed upfront costs, whether the signals default on their claims or not.
  • Default-contingent signals where companies suffer monetary loss only when the signals default on their claims, for instance, when a high price signal matches with equally high quality.

Keys to signaling success

Maintaining a consistency throughout the organization as to the meaning of the signals is crucial to the success of signaling marketing. Once a signaling strategy has been decided by the company executives the information must be passed on to every employee from top to bottom. Failure to do so may not only cause inconsistency in the quality level but also mar the reputation and integrity of the brand. Equally important is how the rival companies interpret the meaning of signaling.

Also, as responsible marketers, it is rather important to examine your conscience before indulging in signal marketing as using it to promote transactional sales at the detriment of brand integrity is unethical and immoral. In light of this, signaling management has become a tricky task of business leaders. The correct interpretation of sales signals enable the executives to brace themselves to avoid any potential threat or to position them to take advantage of the opportunity.

Having said that, with signaling marketing it is still hard to predict the response of the target audience. Neither is it easy to gauge the perception in the minds of the recipients. Moreover, the way one party perceives the meaning of signals may not be the way another party views them. And that is why it is advisable and a prudent strategy to test the signal response on a smaller scale in an area that closely resembles the target market.

Photo Credit: Bart Anestin

Kickstart Your Start-up by Capitalizing on Weaknesses of Multinationals

Kickstart Your Start-up by Capitalizing on Weaknesses of Multinationals

Kickstart Your Start-up by Capitalizing on Weaknesses of Multinationals

Start-ups become fat by converting the weaknesses of multinationals into their strengths

Big firms seem to have it all. Audacious business plans that seem to span a lifetime. Intimidating logos that have withstood the test of time. And brand strategy that tells stories like fairy tales. Moreover, they have been in the business for decades. This has enabled them to amass the expertise necessary to withstand any political upheavals, economic uncertainties, and social changes. These pioneers have managed to go through the experience curve.

However, in recent years, entrepreneurial firms have also sprung up like mushrooms despite some setbacks. More often they set their wheels in motion without much planning or strategy. Although market forces have compelled them to do so for future sustenance. They did not have the political, economic or social clout that the giant behemoths claim. They still managed to become successful companies in their earnest desire to satisfy a market need in their respective fields. How did they do it?

What are the competitive advantages of big firms?

Many large corporations and multinational conglomerates consolidate their production processes to cut costs and to centralize their decision-making structure. The economic and trade policies of several governments make it easier for those companies to do so. It gives them a huge advantage. They are able to cut costs. They are able to borrow from the expertise and resources of the geographical area where they base their production activities. For instance, they take advantage of the cheap labor or tax systems, and sometimes even the weather conditions for certain products. They win the favor of labor unions and local communities in which they reside since they create jobs and stimulate the economy. And they seem to have very cozy and symbiotic relationships with peripheral businesses within the industry.

Another advantage multinational companies have is deep pockets that enable them to produce flashy television advertisements during high-profile international events such as Olympics and in popular venues backed by celebrities. Such marketing gimmicks are unrivaled and smaller firms cannot match them because of the high price advertisers demand. Such advertisements have a wider appeal, and at the end of the day, it’s a numbers game.

The social and business network that large consumer packaged goods (CPG) companies have gained due to being in the business market for a very extended period gives them access for prominent placements on shelves. In the cases of large service firms, this gives them the enviable position to gain access to huge conglomerates through providing consultancy support. If nothing, public perception favors big company brands.

What are the weaknesses of start-ups?

Start-ups on the other hand, by them being in the infancy stage, unfortunately, do not have many of the power and privileges that big businesses have. Mostly people who have either failed in the job market or out of stark economic necessity found a company which implies less financial resources. Often they are at the disposal of friends, families or fools to lend them money to scale their business operations. Although venture capitalists and angel investors have risen in recent years, the brutal bureaucratic procedures involved in getting to pitch in front of such capitalists deter many start-up entrepreneurs to abandon their efforts at a very early stage of the process.

What is then left for them to do, is to start from the grassroots level that entails knocking on the doors of prospective customers. It takes an enormous amount of motivation, ambition, and drive which are rare commodities in this age of instant gratification because the efforts take a long time to yield results, if at all. Sometimes the lukewarm response from the market can take a toll on the individual and can sap the energy level. It can lead to frustration, disenchantment and a lack of self-worth.

Hope – yes we can!

Hope is at hand. Think about the risks involved in consolidated manufacturing enjoyed by many multinational companies. In most cases, the companies have a stake in the real estate of the production system – land, factories, and capital-intensive machinery. They are vulnerable to single currency swings as well as the economic chaos that may ensue after that. Start-up companies who are smart enough outsource their production of goods and services. Any pitfalls then will be borne by the companies who own the production infrastructure. In other words, start-ups get to make hay while the sun shines and can quickly withdraw when times are rough.

Thanks to the time we live in, the Internet has made it possible for start-ups to reach out to an equal number of people using social media and digital marketing in the comfort of their dens or basements that they use to start their businesses. Hence they do not have to resort to the flashy television advertisements.

Online distribution network companies such as Amazon works as a perfect substitute to prominent shelf placement for start-up companies. It has enormous potential for entrepreneurial firms for secure delivery as well as to scale their operations to the magnitude of that of multinationals if done right.

Take a piggy-back ride

Outsourcing the production processes as well as online marketing and distribution can all be done with a fraction of the cost sometimes even free of charge. For example, the success of content marketing relies predominantly on the quality of the content. If one looks around one can find hundreds of tools and tactics that is being made possible in this day and age for a start-up company to grow and make money. So the moral of the story is to take a piggy-back ride on the times we are!

Additionally, in most industries barriers to entry are falling making it irresistible for an entrepreneur. The Internet gives us real-time information about the market thereby making start-ups more attuned to the needs of the market. What all these factors do for a start-up is give them much-needed agility, dexterity, and nimbleness in the decision-making.

Photo: Verne Ho

Dare to be Edgy for Profitable Growth

Dare to be Edgy for Profitable Growth

Dare to be Edgy for Profitable Growth

Companies looking over the competitive landscape and moving away from the arena where their rivals squabble find profitable growth. Reinventing thus a business with bold and visionary thinking comes with huge risks as well as rewards. On the other hand, some companies have a tendency to over-rely on their core business. It can lead them to a blind spot where they miss growth opportunities. Sometimes for success, we need cautious and incremental changes. In other words, an in-between strategy that is neither a disruptive innovation nor a radical transformation.

Alan Lewis and Dan MacKone articulates such a mindset through their “Edge Strategy”. The book by the same name is based on a three-year research of innovation strategies of 585 international brands. It advocates three ways in which businesses can profit by looking for opportunities that lie hiding in plain sight. It involves rethinking the edges of your company that has proven to deliver 15% higher returns.

Accessorize your product

Understanding what your core business is essential for profitable growth. Equally important is discerning what features would augment the product. Alter the elements of a core offering that would appeal to the target market. Stretching the merchandise may appeal to the target market that can lead to revolutionary results. One way is to offer value-added services to your product by way of add-ons and upgrades. Another is to include service options with the core product being offered. Also, price it correctly so that people would be willing to pay for it.

JetBlue was on the brink of collapse a few years ago due to operational failure. They toyed with the idea of mergers, alliances and code shares that are practiced by some international carriers. A thorough analysis helped them realize that their market consisted of value-added travellers. They decided to apply the product edge strategy. The company managed to revive its business and stay in the market. They reduced the fare of the core product drastically and introduced paid accessories and add-ons such as extra legroom options and additional charge for a preferred seat. Passengers were willing to pay for that extra convenience and comfort for a pleasurable air travel. It generated more than $75 million in incremental profit. All because JetBlue accessorized their core product with bells and whistles.

Smoothen the customer journey

Time to time it is imperative for company officials to walk in the customers’ shoes. Their missions differ at every step of their decision-making journey. Look out for these pain points throughout the journey the customer takes in the process right from the awareness of the product until the purchase and even post-purchase. Try to support this trip by alleviating the pain points in an innovative way. Information-sharing and educating them on how to relieve pain is an excellent way to walk them through the voyage.

Greengrocer is a case in point. Over time they have realized that customers are not only looking to buy green vegetables but they also want them washed, cleaned, chopped and even ready to be prepared. The beauty of it is that customers are willing to pay the marginal price in exchange for the convenience it offers. Whole Foods went a few steps further by offering shoppers different food stations such as pizza ovens, salad bars, and home-prepared meals and even appealing seating arrangements that they claim now on an average generates one-fifth of their total revenue. And shoppers never seemed to complain when the mundane weekly grocery purchasing turns to lifestyle family experience. Thus Whole Foods have smoothened the customer’s journey every step of the way in an impressive and innovative manner for profitable growth.

Leverage enterprise resources

Make an inventory of all the business assets. Find new ways to unlock value through putting to use the company’s under-utilized assets or untapped resources so as to create a new revenue stream that would generate more income. Industry pioneers routinely sell their valuable expertise to the outside firms while still staying in business. By exploiting such possessions and using them in different contexts, companies have diversified and have amassed vast sources of revenue.

Amazon rents out its web services, its technological infrastructure, to third parties since the company realized that it would add value to other businesses. By doing so, Amazon built added a sustainable cloud computing business to its core product and enhanced its profitable growth. The competencies it had at its disposal was valuable enough for which they could command a good price. A critical assessment of their asset inventory enabled Amazon to recognize the potential of one of its untapped opportunity, and they capitalized on it. When company resources are being put to use in different context wealth is created and not destroyed. It does not have to be at the expense of disruptive innovation or blue ocean strategy but in tandem with them. And it adds to the bottom line of the company by way of generating additional revenue.

Leverage the periphery

The authors of “Edge Strategy” reckon that pursuing any one or all of the above strategies can lead to a myriad of opportunities for extra sources of income from which companies can choose depending on the profitable growth potential and feasibility of implementation. Think harder about the periphery or the “edges” of existing businesses.

The strategy is not new. However, very too often when thinking about company growth business executives are obsessed about pursuing industry disruption or inventing the wheels that come at a huge cost. Instead, look under your noses, and you will find several opportunities to earn extra income by making incremental changes to the existing businesses. Or they stay too focused on their core offering that they miss out on the changing trends thus rendering their products obsolete and redundant. Adopting an Edge Strategy® not only unearths inherent capabilities to create wealth but can also be rapidly implemented because it is a low-hanging fruit.

Photo: Greg Rakozy

Plane Makers Make it plain for Market Share

Plane Makers Make it plain for Market Share

Plane Makers Make it plain for Market Share

Boeing, the US plane producer, was once the world’s biggest aircraft maker based on its global market share. It has certainly learned that one person’s poison is other person’s meat. In this case, it translates to one company’s failure is another company’s success. Sadly, it is a fail-win situation. Blue ocean strategy teaches us to look for the failures in our competitors to exploit the opportunities. And to create a niche product that would appeal to those customers that have fallen through the cracks. It is one way of making the fierce competition irrelevant. Boeing and Airbus teach us just that. Airbus rose up to the occasion when airliners felt the need for more efficient aircraft. It was a time when Boeing was too caught up in the Dreamliner program.

Boeing going gone

Recently, the U.S partially lifted the economic sanctions in Iran. It enabled the plane maker to reach a deal to sell 100 new planes to Iran Air. However, in between being considered the largest aircraft maker and the Iran Air deal it was on a downhill path. Plane makers were creating a vacuum in the industry. Airbus took advantage of the opportunity and manufactured aircraft to fill the vacuum. Airbus applied the Blue Ocean Strategy from which Sales and Marketing Professionals can learn a few lessons. To put it in context it is worth exploring the rival company, the European plane producer Airbus, and its global market share in comparison to Boeing.

Airbus in business

Europe’s aircraft manufacturer, Airbus, is passionate about aviation and designs the world’s best and efficient aircraft, and is reputed to shape the future of air transportation by regularly capturing half of all commercial airliner orders. In 1995 it became the first plane maker to allow airlines to function without the need for financing a fleet. In the recent decade at an enormous expense, it developed the A380 superjumbo, albeit not yet with enough orders, is another feather in its cap. Airbus entered into the business 50 years after Boeing began its market share domination. It had the confidence and the guts to take Boeing by its horns. What would be interesting is to analyze how it stacks up against its counterpart.

Boeing vs. Airbus

Since the 1990s, the airliner market was a duopoly one with just Boeing and Airbus enjoying the space. However, Boeing’s unassailable lead in the sector of commercial airliners came under threat from Airbus when since 2012 the European firm outpaced it with the number of orders. Boeing’s failures include pricking its pride when it could not manage to stay head to head with Airbus who has been in business for less than half its time. What most companies fail to do is to use its Sales and Marketing force to analyze the competitive landscape on a regular basis either monthly or quarterly. What did Boeing do to reach a situation where Airbus out-competed it using fifth fewer employees? It failed to look beyond the horizon at its immediate competitor.

Boeing’s Dreamliner turns to nightmare

The Dreamliner program that projected to cost $6 billion and take off in 5 years instead took $32 billion and eight years to complete due to technical failures and supply chain hassles. Boeing was the first commercial plane made of lightweight composite materials. It outsourced the production of its 787 Dreamliner to global suppliers causing mounting costs and delays. Caught up in its execution Boeing’s plans for the rest of its other fleet became. The Dreamliner Programme utilized the entire resources of the company, and that consumed the corporation for a long time. While Boeing had its head deep in the sand like an ostrich, so to speak, it created a perfect space for its rival company based in Europe, Airbus, to jump in and carve a blue ocean strategy to expand its market share.

Blue ocean strategy of Airbus

Airbus adopted blue ocean strategy by taking a lead in the production of fuel-efficient narrow-body jets. This resulted in more orders for its A320 neo planes than its counterpart 737MAX. Boeing’s troubles with the Dreamliner also helped Airbus win more orders of its jet A350. Boeing’s 777X is not due until 2020. This saga is a classic example of how Blue Ocean strategies can be created by carefully observing the gaps in the operations of competitors. Marketing then is a function of a company that finds the crack between the needs of the customers and the products offered in the market and plugging the gaps by introducing innovative solutions thus making the competition irrelevant.

Sales and marketing parallel

Drawing parallels from the Airbus-Boeing case study, Marketing Professionals can better align their market share strategies to fill the gaps in the market created by their competitors through close observance and thorough analysis. Sales revenue can be generated not only by satisfying customer needs but also by stepping in to fill the blanks in the target market. More often than not expansion plans of a rival company can be an opportunity for another company to service the customers left by the side by the expanding company who get carried away in the execution of plans.

If in a duopoly market like that of aircraft manufacturers that is highly regulated blue ocean strategy works one can be forgiven to believe that they can be set up in almost any market if one starts thinking out of the box. It requires an entrepreneurial spirit and innovative mind. Companies should encourage Sales and Marketing Professionals to think beyond or without the box so that their creative juices begin to pump in. Otherwise, it would be another case of Boeing Going Gone where a company that is half its age – Airbus – takes over within a matter of very short period.

To learn more about market share and how to dominate your market, consider the SMEI Certified Marketing Executive program.

Enable Employees to Unleash Their Power

Enable Employees to Unleash Their Power

Enable Employees to Unleash Their Power

A successful Human Resources Strategy involves efficient talent acquisition, accurate performance measurement, and fair employee compensation. In every step of the employee lifecycle in a company, there is potential that lies unexploited. Managers can unlock it by EN-abling the employees. It ensures the elimination of disgruntled idle workers. In addition, it helps in reaching the full threshold of the employees. It has proven to result in a powerful transformation within both small and large enterprises. Companies are made up of employees, and it is through exploiting their latent talent that corporations have become successful.

One of the primary responsibility areas of Sales an Marketing leaders is the acquisition and retention of their team. They would do well by following the process involved in EN-abling the employees. Broadly speaking, there are seven ways to EN-able employees. They are EN-ergize, EN-gage, EN-courage, EN-tice, EN-trust, EN-tertain, and EN-d.


Workers should have an understanding of how they fit into the goals of the organization. That motivates them to do even more than what is necessary. The only way to achieve this is by EN-ergizing them. This is effectively done by having an open dialogue with them about the company’s goals. Consistent and continuous communication between the management and employees has a powerful effect than building defenses between hierarchies. Managers must make it a point to give them constant reminders of the results of their daily efforts. This can also ensure that they stay away from empty tasks.


It is a proven fact that the more satisfied the employees are in their jobs, the more inspired they are. Job-satisfaction is attained through EN-gaging workers through leadership skills by providing them meaningful feedback, relevant reviews, and quality coaching. Suggestions thus obtained can inspire employees to take action on them to improve and develop their personality thereby enhancing job satisfaction. According to Jack Welch, former CE of GE, this is the critical insight to driving phenomenal performance. Excited and animated conversations grow out of such performance that let staff share innovative ideas and bring forth camaraderie.


Sales and marketing executives tend to be more entrepreneurial in nature and disposition than the rest of the team. It is also in their nature to want to own the changes that are happening within the organization. EN-courage them to participate in the process, to share innovative ideas and ask for feedback. Inviting them to make a difference in the company goes a long way in motivating them to take action. And when things work out appreciate their great work. That would empower them to not only deliver continuous improvement but also to drive innovation throughout the organization.


Move away from “just-in-time” recruiting to “talent-funnel” recruiting. “Just-in-time” recruiting is hiring that happens once the company advertises the job position whereas “talent-funnel” recruiting is being proactive and already having a talent pool from which the company can hire top employees. The way to achieve this is by headhunting A-class Sales and Marketing Professionals in the industry and from within the company and EN-ticing them to join the talent funnel list. As time goes by and as the company recruits more and more high-potential employees from within the talent funnel the productivity and performance level is bound to go up.


It’s a process of respect. EN-trusting employees in Sales and Marketing in the democratization of decision-making to get their unique perspective can empower the teams and internalize the process. Taking such personal responsibility would also entail rewarding and recognize as well as penalizing their results equitably and appropriately. To minimize the penalties and for efficient execution of their decision actions, it is important to put a system in place that would permit real-time collaboration and communication during the implementation stage. It keeps employees aware of their pitfalls promptly and to steer clear of it.


Gary Hamel at a speech at WorkHuman articulated it better than anybody about the importance of approaching work with the same lens as we approach our lives. Our lives are full of necessary-to-do mundane tasks, but we also look forward to climbing mountains, crossing oceans or pursuing our hobbies. We set aside a certain time for our me-times. Work has to be similarly EN-tertaining. Sales and Marketing leaders must recognize the hidden interests of sales and marketing executives and allocate tasks to them they enjoy. Classic academic studies have repeatedly advocated that organizations should allow fun at work.


When employees quit the company it is a prudent idea to EN-d it on a good note. Conducting exit interviews in a strategic manner can ensure the smooth exit of the employees, especially those involved in the Sales and Marketing processes as they can turn out to be the advocates of the company for better or worse. Some companies conduct exit interviews when employees tender their resignations, on the last of their employment and six months after leaving the company. The feedback thus obtained can be used to implement changes to reduce turnover and keep workers satisfied.

The implication is rather clear. The onus is on Sales Managers, Marketing Directors, and Business Development Executives to harness the power of Sales and Marketing professionals for the progress of the companies and for pressing on towards the organizational goals and objectives. EN-abling employees would also ensure that there is a shared vision among the employees and the management. The purpose of any one of the ENs mentioned above should be to motivate employees to go that extra mile and be involved in the organizational process for enhanced productivity. The result would ideally leave corporations with increased profits and revenue.