Archive for Business

Hiring the Right Sales and Marketing Team

Creating a Challenger Sales and Marketing effort in your business is not an easy task. In my last post, I suggested two key things a CEO should do to try to implement a Challenger Sales and Marketing team in their organization: 1) Employ the right people, and 2) Persistently support them.

In this post, I will expand my thoughts about employing the right people.

In the last parts of “The Challenger Sale” by Dixon and Anderson, they discuss the nature of the leaders who make successful Challenger Sales Managers.

They cite management skills such as integrity, reliability, and listening skills as necessary traits as these are important in any management position, not just sales management.

Candidate Selection is the First Step

If you are creating or expanding your Challenger sales team, I believe you need to be very concerned about the people you hire. I am a big fan of psychological testing in a hiring process. This is especially true for a bigstock Decision Making Or Emotional I 230989879 315x280 - Hiring the Right Sales and Marketing Teamcritical hire.

At the risk of showing my age, I will confess to you the first testing process I ever used was a test intended for the selection of officers in World War II. (Yes, it was really old)

WWII was a time when a team had to scale rapidly and the military relied on a testing process, however flawed it was, as part of the process to select leadership. The “other choice” was much worse.

In Strategyzer terms, testing had a strong value proposition.

In comparison to testing products available on the market today, it was simplistic. The company where I worked used the same test for all management positions. There was no variation in the test for engineers, salespeople, accountants, or managers in operations. All took the same test.

My role at the time was to manage engineers. After a few uses of the tool, I came to realize the best candidates for me had high intelligence (above 90th percentile), and decisiveness (which I associated with getting things done). What didn’t matter very much was introversion versus extroversion and social ability unless it was at either the end of the scale.

Not everyone in my company agreed with the test or the testing process, usually because they didn’t like their own scores. (This is a point to remember). But my personal opinion was supportive.

One form of criticism was that a reliance on the test might result in a manager discarding a candidate which might actually be a fit  – in other words, a false negative. I agree that was a possibility. On the other hand, my experience was the test never gave me a false positive. I had a high correlation between test results, and high performing employees.

Today’s Tests Are Based on Better Science

I have two test recommendations for you to consider as you develop your sales and marketing teams:  PXT Select from Wylie and SmoothHiring from ClearFit. I am familiar with both of these but there may be others.

Do your diligence on the tests you select. Some tests like DISC and Myers-Briggs may provide insight into behaviors but, in my opinion, they do not get down to the specifics about who you should, or should not, hire.

The science for PXT Select and SmoothHiring is solid. Both test for personality traits and interests. Both tests are administrated online. I do not recommend testing online for intelligence or cognitive ability. It’s too easy to look up the answers you need. If you want to test for this you should do it onsite where you can control the environment.

PXT Select is distributed through partners who assist you with the mechanics of the test as well as interpretation. It is a sophisticated product. Not only do you get an assessment, you also get interview questions based on the results to assist you to validate the results of the test. Uniquely, I believe, it also advises you about how to interpret the answers you might get to the questions.

Typically, users use the test to choose between 2-3 final candidates in a search process. You pay for each test taken.

SmoothHiring is a SaaS product. Rather than test final candidates, the test is placed at the beginning of the search process. The application assists you to develop job descriptions, and then places the search on all the job posting boards you wish. Everyone who applies takes the test. All of this is done for a flat fee per posting per month, no matter how many candidates take the test, or how many people you intend to hire.

The app then advises you which candidates are the closest fit to your desired candidate profile. Said another way, this tool assists you to screen, in an unbiased way, the surge of applications so typical in many searches.

Both products come with standard profiles for typical positions,


If you want to build a Challenger team, I recommend considering a custom assessment profile rather than the standard profile. With both the PXT Select and SmoothHiring products you can develop custom assessment profiles.

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A custom assessment is a way to add likely successful people to a team you already know.

There are two ways to do this. You can manually create the profile. But if you know you already have a good sample of Challengers in your organization that represent top producers, you can test them and let their composite scores serve as your template.

If you haven’t used testing in hiring before, I recommend you get a bit of assistance to begin. Many small and medium size businesses are not familiar with testing.

One of the benefits of creating a custom assessment profile is it causes you to consider your desired profile and subsequently adjust it later if necessary.

Over-reliance on Testing

The experts in testing will tell you that there are limitations to testing. For example, many of the questions provided to you in the PXT Select assessments are there to help verify the results of the test.

Don’t use testing as a substitute for other things you do in an interview process. Let your own interviews and instincts play a role. Background checks, reference checks, and a review of social media might also be considered. An on-site cognitive ability test could be useful in your assessment.

I had a colleague in a sales management role who did credit checks on candidates. This might seem counter-intuitive, but he liked candidates with debt. He knew if they needed the money their situation might serve to motivate for success in the job.

In you conduct an interview process without testing, you may also want to remain cognizant of the fact that candidates who profile as “relationship builders” will work to build a relationship with you. You will find them to be likable and pleasant, but not necessarily qualified.

Team Member On-Boarding

What you do after you hire a candidate may be as important as the selection process.

If you are building a Challenger team, then knowledge about your products, terms and conditions, pricing, online content, and industry is essential. Challenger sales teams strive to be the most knowledgeable in their industry, something which cannot be faked.

Clearly, your top sales and marketing people must be good managers and mentors if they want to “teach the teachers”.

The best practices for on-boarding begin with a plan. What is accomplished on the first day? What is accomplished the first week or the first month? What is the measure of success for your on-boarding? How are people trained, tested, and evaluated in your on-boarding process?

How do you decide someone you hired is not a fit? Do you have a staged on-boarding process? Does a new hire need to master one stage before they go to the next?

pic 292x280 - Hiring the Right Sales and Marketing TeamAbout the Author: Bob Kroon is a coach for high-performing Founders, CEO’s, and Owners. He founded Expeerious, LLC ( in 2015 to exclusively focus on coaching the success of Top Executives. For over 25 years, Bob served variously as CEO, COO, Division President, and Group Vice President.

The majority of his career was in manufacturing durable goods. Bob is an enthusiast and practitioner of Lean Thinking since 1986. He also has broad skills in M&A including financial modeling, deal structure, diligence, and post-close integration.

Bob’s current clients are diverse and include businesses in healthcare, agricultural products, robotics, luxury goods, and education.

To learn more about how Bob coaches and thinks, you can find over 200 questions he’s answered on Quora. Visit his website at: for additional blog posts.

Leading Sales and Marketing – the CEOs role

Is Patience a Virtue (when a CEO gives direction)?

Do you have patience? In my last post, I shared my viewpoint on some key takeaways from “The Challenger Sale” by Dixon and Anderson; particularly the profile most likely to create a top performer, the Challenger, and the value of a top performer.

After reading the book, the authors seem to take a perspective the conversion to a challenger selling model is a problem to be solved within the confines of the sales department. They suggest it might take five years for some organizations to change their sales approach to challenger selling.

As a CEO-Owner-Founder coach, I cannot advise you to have five years of patience. Nor do I agree the issue is solely a sales department issue.

Setting Deadlines

A favorite mentor in my past once told me the test period for a general manager was about 18 months. At that point, you “would know what you have, whether the person was going to make it or not.”

Similarly, when a VC invests in a startup, the funds provided are typically expected to be spent in about 18 months. A founding CEO is expected to show significant results by the 12 month point, and then spend 6 months doing another round of fund raising using the evidence from the initial 12 months to justify continued investment.

I can personally attest, also. For over 30 years in my career, I either had a new boss or a new assignment … every 18 months.

There is something very familiar to me about the 18 month business-breathing-cycle.

I believe the same advice should apply to the transformation of your sales culture. You should be able to execute most of the meaningful changes in 18 months time.

Dixon and Anderson might be correct with their five-year viewpoint IF change is solely driven by the leadership of the sales team. What would be necessary to accelerate change? Read on.

Top Executive Leadership

As in all efforts to drive change in an organization, the role of the CEO, Owner, or Founder is crucial to success.

The first obligation for the top executive is to ensure their sales and marketing leadership positions are staffed with people intellectually and emotionally aligned with the direction the CEO wishes to pursue. The make-up of the team is the responsibility of the CEO. They are responsible to determine the selection of their next level reports and the retention of the same.

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The role of the top executive in driving change might be difficult, but it is not complicated.

Misalignment is a sure way to fail, a sure way for any initiative to fail.

The second obligation is to give public, persistent support to the sales and marketing leadership. As in raising children, there should be no daylight showing between the opinions of “mom and dad”.

There is always momentum to the way things have been done in the past. People in the organization will find ways to push back on change. Persistence is a way to succeed.

The top executive behavior which would most concern me is indifference to sales and marketing initiatives. I’ve worked in companies where the top executive remained personally passive to the efforts of their sales and marketing organizations.

I remember one situation where the new president of our company put his desk smack in the middle of the sales and marketing departments soon after he joined the company.

His predecessors treated sales and marketing passively and the sales and marketing teams were used to operating without direction from the top. It was a culture shock for them to learn the new president assumed the responsibility and authority to give direction to their organizations.

High-performing top executives know the power of demonstrated leadership.

pic 300x288 - Leading Sales and Marketing - the CEOs roleAbout the Author: Bob Kroon is a coach for high-performing Founders, CEO’s, and Owners. He founded Expeerious, LLC ( in 2015 to exclusively focus on coaching the success of Top Executives. For over 25 years, Bob served variously as CEO, COO, Division President, and Group Vice President.

The majority of his career was in manufacturing durable goods. Bob is an enthusiast and practitioner of Lean Thinking since 1986. He also has broad skills in M&A including financial modeling, deal structure, diligence, and post-close integration.

Bob’s current clients are diverse and include businesses in healthcare, agricultural products, robotics, luxury goods, and education.

To learn more about how Bob coaches and thinks, you can find over 200 questions he’s answered on Quora. Visit his website at: for additional blog posts.

Challenging Your Customers

the challenger sale - Challenging Your CustomersOne book I find useful for understanding sales and marketing as a process is “The Challenger Sale” by Dixon and Adamson. I find myself intrigued and agreeing with much of what they present in their findings. The book was written in 2011 and reacts to the chaos from the great recession. While those events are fading, there remain many relevant takeaways which seem timeless.

From what I infer, the primary target audience for “The Challenger Sale” is Sales Executives and Managers in enterprise businesses. This differs from my intended audience; CEOs, Owners, and Founders. While the target readership is different, there is considerable similarity to our perspectives.

My Key Relevant Takeaways


Sales approaches can be classified.

Based on a study of 6,000 participants, Dixon and Adamson note their researchers were able to identify five distinct profiles for sales reps:



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Five distinct profiles defined in “The Challenger Sale”.

A Plurality of Top Performers Are Challengers

According to the statistics presented by Dixon and Adamson, 39% of the top-performing sales reps in the study came from the Challenger profile.

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Challenger profiles are 23% of the total but 39% of the top performers. Relationship Builders are 26% of the profiles but only 7% of the top performers.

Note the least probable way for you to develop a top performing sales rep is to focus on relationship building.

It can be argued that there is merit to the “Lone Wolf” profile as this is the other profile where there is a disproportionately higher number of top performers. The issue with the Lone Wolf profile is that, by definition, this profile is not an approach which can be easily replicated and scaled.

In small companies, the Lone Wolf might be created simply by circumstances. The sales team might be small, might be acting without skilled leadership, and might have little or no direction about value propositions or business models. To succeed, salespeople figure it out by themselves.

Why Are Top Performers Valued?

While this varies by company, top performers produce 1.5 to 4.0 times as much as the average performers. As the complexity of the sale increases, the difference is greater. Dixon and Adamson cite the example of one company with 100 salespeople where 80% of the sales were the result of the efforts of just two people.

Clearly, there is a case to be made to put an effort into finding and developing top performers.

Creating a top-performing sales team might also be a critical element to the success, maybe survival of your company. If you wrestle with keeping the cost of customer acquisition low enough to have a scalable or sustainable business model, having top-performers on your team can reduce the cost of customer acquisition.

It should also have an effect on the revenue per customer. Arguably, top performers should have more customer retention and the ability to win bigger customers.

Bill’s Story

Challengers teach their customers about their own businesses. They bring value to the customer because they can advise on choices a customer can make and the implications of various choices.

Early in my career, I was in a B2B business and had the opportunity to travel with “Bill”. In retrospect, I see Bill as a Challenger. I witnessed Bill walking into a customer’s business at which point literally everything else that was happening was paused. “Bill was there” and he was the advisor and mentor to the business. At a glance, I could see Bill was a very trusted advisor.

Bill told me about a situation with another customer. He observed his customer for several months and was concerned because it was apparent the customer was not making money. After some reflection, Bill went into the business one day and told the owner his accountant was an embezzler.

Bill did not have access to the financial statements. He came to his conclusion based on his intuition about the situation.

The owner asked Bill to leave the business and never come back. The accountant was a close personal friend to the owner and godfather to the owner’s children.

Six months later Bill got a letter of apology. While they were angry about the accusations, the owner did some investigation.

They found money in 33 different banks.

Was Bill a top performer? Yes, salesperson of the year for my company.

The Implications for Your Marketing Efforts

While top performers can come from any of the profiles, what the authors are suggesting is an effort to support challenger selling increases your odds of creating top performers more than 5x an effort to support relationship building.

LinkedIn agrees but says it a different way. While encouraging their members to “engage with insight” LinkedIn says “nearly 64% of B2B buyers report they appreciate hearing from a salesperson who provides information or insight about their business.”

The content in your blogs, emails, and newsletters should primarily teach your customers about their businesses. If you are interacting with your customers you see patterns which lead to success and growth that might not be seen if all a customer knows is about their own business.

Or, you could see a creative business practice one customer is doing to solve an issue that another customer could also adopt.

Considering the previous discussion about the importance of “customer experience”, a content strategy which focuses on teaching can become part of your customer experience.

As I’ve mentioned before, your content speaks to many different audiences. Content which teaches will be valuable not just to your customers. Consider also the impact to new people in your organization.

The Golden Rule for Sales

Early in my career I served in a role as Product Engineering Manager for a manufacturing company. The responsibility of my organization was to provide the operations and manufacturing engineering organizations designs and specifications. In the world of engineering, this was done with “prints” and “bills of material”.

If a print was “silent” on an issue, that meant there was no limitation to what they factory could use. Maybe the print said “Cold Rolled Steel” but nothing else, for example.

At the next level of control, the print would list specific suppliers, whose products were qualified through our quality evaluation processes.

At the highest level of control, when we were convinced that specific features were important, we would specify a specific product from a specific supplier.

In any event, my organization was sometimes highly influential in the process for supplier selection, particularly when a specification was precise.

golden rule of selling 420x280 - Challenging Your CustomersAs I reflect on this today, the sales representatives who were the most valuable to me in the deliberations surrounding specifically-engineered products were the ones who could show me the best way to incorporate their products. Usually these were trained factory representatives; in other words, challengers.

In contrast, companies represented by independent sales representative organizations were the most frustrating. They could seldom advise or make a decision. They couldn’t answer my technical questions. They usually had to “call the factory”. But they were always good for buying you lunch.

Which sales approach was the most successful? It’s easy for me to understand the value of a challenger salesperson when I envision the concept from the perspective of a customer interested in creating a top performing product or service.

Many CEOs worry about people in their organizations who make purchasing decisions based on the perks they get from relationship-building salespeople. For most, it is common sense that buying decisions should be based on what is a good business decision, not personal benefit.

I worked for one company, however, that became very proactive and made it a written policy to limit “gifts” from suppliers to incidental amounts. Lunch or dinner might be ok, but not vacations, cars, or other large gifts.

In one of my other assignments, the company where I worked was spending about $50 million on a factory expansion. Soon after all the contracts for construction were awarded, the lead facilities engineer for the project showed up driving the Lincoln Continental previously owned by the General Contractor. Even if this was an innocent, arms-length transaction, the perceptions created should have been enough to nix the deal.

As the leader in your business, how do you want people in your company to make decisions? And how do you think your customer counterpart wants their employees to make decisions?

Challenger Content is Neutral

Maybe you don’t agree with a focus on building a challenger sales organization. If you have a personal background from another selling profile or your organization is ingrained with another selling profile, you might find it difficult to change your approach.

It shouldn’t matter to your marketing content. All profiles can benefit from a customer teaching approach to your social media content. No one is hurt by this approach.

pic 292x280 - Challenging Your Customers

About the Author: Bob Kroon is a coach for high-performing Founders, CEO’s, and Owners. He founded Expeerious, LLC ( in 2015 to exclusively focus on coaching the success of Top Executives. For over 25 years, Bob served variously as CEO, COO, Division President, and Group Vice President.

The majority of his career was in manufacturing durable goods. Bob is an enthusiast and practitioner of Lean Thinking since 1986. He also has broad skills in M&A including financial modeling, deal structure, diligence, and post-close integration.

Bob’s current clients are diverse and include businesses in healthcare, agricultural products, robotics, luxury goods, and education.

To learn more about how Bob coaches and thinks, you can find over 200 questions he’s answered on Quora. Visit his website at: for additional blog posts.

Strategic Customer Experience – Two Case Studies

Customer experience defines your brand in an online world. In my last post, I suggested your messaging has both an external and an internal effect which can be valuable to many audiences.

Companies only survive and thrive when they meet the needs and solve the pain points of their customers.

The promise-makers in your organization, marketing and sales, and the promise-keepers in your organization, operations, must be in alignment. This is why the messaging you do, on your website and elsewhere, must radiate in all directions.

There was a time when customers knew your brand primarily from the marketing promises which were made. Today, there are too many ways potential customers can do diligence on the actual way you keep the promises you profess.

Yelp reviews, GlassDoor, Google, and a myriad of other sites allow people to review your performance. All of these matter because they represent your customer experience as reported by your customers.

What is customer experience? I see two ways to discuss the topic. There is operational customer experience and strategic customer experience.

Both aspects of customer experience are important. In your role as CEO, delegate the responsibility for operational customer experience improvement to a trusted subordinate so you can devote your time and resources to strategic customer experience improvement.

Strategic customer experience requires change and coordination across many functions in your business; a role for a CEO.

Operational Customer Experience

At one level, I’m sure you  recognize customer experience negatives; waiting in line, being put on hold, being misdirected to the wrong person, mistakes in billing, rude customer service, missing web page links, wrong phone numbers, not being able to talk to a real person, … almost too many ways to mention how bad experiences can occur.

One way to create good customer experience is to work on ways to eliminate bad customer experience.

I don’t wish to take anything away from these efforts to eliminate issues as they are important to your business. On the other hand, I view these as operational issues which should be addressed, but not as strategic customer experience initiatives.

Strategic Customer Experience

In this post, I will relate two cases studies which I believe were successful on a strategic level. I was personally involved in these and remember almost all the details as hundreds of hours were devoted to making these successful.

customer experience diagram - Strategic Customer Experience - Two Case Studies

Two Strategic Customer Experience Case Studies


Case Study #1: Competing with Short Lead-times

When I served as the President of the BPI Division for HNI Corporation, we had a business which marketed itself primarily to retail office furniture dealers. The company marketed and manufactured low-cost office furniture systems. Typically, retail dealers served small and medium size businesses in their local communities.

A retail dealer usually had a store with showroom and a few offices. Salespeople worked on the showroom floor and served customers as they came in the door. Some had warehou

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ses in a second location.

In contrast, a “contract dealer” had an outside sales team. Rather than wait for customers to come to the retail location, the contract salesperson would identify projects and pursue the architect, designer, or facility manager who most influenced the purchasing decision.

The value of the customer versus the cost of a sale meant most small businesses weren’t served by a contract salesperson.

Small businesses don’t always plan everything much in advance and might sign a lease for a new space and/or expansion of their business which involved hiring more people. Faced with a deadline for a move and perhaps already having a relationship with a dealer, the small business person would usually go to the nearest retail dealerships, explain their issue and ask what they could do and how soon could it be done.

This was our critical moment. We wanted the retail dealer to suggest our product line. This was the focal point of our strategy.

The first part of our solution was to offer our product line three different ways where the dealer could respond quickly without a long lead-time for the products.


The first way to buy products from us was to order “normally” where our lead-times from order to shipment were three weeks. Shipping typically took another week so a dealer could promise “four weeks” and be able to perform. About 40% of our business was ordered in this fashion. This was also the way to get the best price from us.


The second way a dealer could order was to request a “five-day” lead-time from order to shipment. Including delivery, a dealer could be ready to do an installation in two weeks. We charged more for this, at first about 5%. This was also about 40% of our business.

This gave us some operational heartburn. Orders didn’t necessarily flow in a constant manner and there were times where we took Monday off but worked Saturday in the same week.

We decided to raise the price for the five day lead-time to a 7% premium over the normal program to see if we could get business to align more with the three week delivery.

It didn’t work as we intended. There was no detectable shift in the way dealers ordered and no complaints. The extra charges simply went to the bottom line (unlucky, huh). To fully understand, consider that most businesses, ours included, strive to make about 10% profit. With the tweaking of one marketing program we increased our profits by 20%.


The third way we established was to have most of our key products available through a wholesale channel of distribution. There were approximately 50 wholesale locations which carried our products in the USA. A dealer could buy from these wholesalers who would typically deliver in 48 hours or less. The downside was the wholesaler charged about 25-30% more than what a dealer would pay if they purchased directly from us.

This was fair. That was the value added by the wholesaler. This channel of distribution worked very well for us. There were many situations where products were needed in that time frame.

Things Which We Had to Do Well

We spent hundreds of hours changing our manufacturing processes to be “just-in-time”. We did factory process development projects to the point where we could manufacture any product in any color in any order with no set-ups and no cost for one-at-a-time production.

We didn’t accomplish this with work-in-process inventory. Instead we eliminated set-ups. Our work-in-process was so low the accountants counted it only once per year.

We also implemented daily factory scheduling. The previous method was to schedule everything once per week.

We Added More to Our Value Proposition.

We created a unique guarantee; “On-Time or On-Us”. What we meant by this was we would pay the freight for the customer if we didn’t ship on time.

We created “BPI University”. Dealers could send their operations people to a hands-on class where they could learn best practices in installation.

We became the first company in our industry in the US to create a library of products for CAD Space Planning, saving a dealer’s time in the specification process.

Creating a strategic customer experience is a complete team effort, not just something done by sales, marketing, and customer service departments.


Our brand became associated with short-lead times. This was our reputation. I remember situations where we knew we were going to miss a shipment date because of a product quality issue. We reacted by air-freighting the shipment so as to not violate our promises.

The organization was well aware of the cost for doing this and it didn’t take long for internal business practices to evolve to the place where we never again had to do air freight.

For the dealers, our product line became their single highest-margin offering. In visits with dealers I would assert that fact, challenge them to dispute what I said. Not once did I get an argument.

Last, but not least … the division ultimately grew revenues five-fold.

Case Study #2: Competing on “Time to Market”

time to market 300x300 - Strategic Customer Experience - Two Case StudiesIn this case, I served as Division President for APW Enclosures, a division of APW Worldwide. My division made technical enclosures for OEMs such as IBM, HP, Cymer Laser, Applied Materials, Data General, Sun Microsystems, Qualcomm, Silicon Graphics, and several others. The technical OEMs made their widget; we made the cabinet which housed it. These were typically the size of a refrigerator or larger, high-value, low-volume, with many configurations.

In addition to the “box”, we installed power supplies, fan trays, cabling and harness, backplanes, and other items which were not the OEM widget. We also had an internal supply chain which could provide injection molded components, electronic assemblies, and machined parts. There was very little need for Tier 2 partners.

We coined a self-serving terminology. We referred to ourselves as a Level 5 Supplier as a way to communicate our value proposition. Level 1 competitors made metal parts, Level 2 competitors made assemblies, Level 3 competitors made cabinetry but just the box, and Level 4 competitors did some component integration.

As a Level 5 Supplier, we could do it all. There was no need for another Tier 1 supplier to serve the OEM.

I was quite pleased one day when an OEM used that terminology in a discussion with us. I knew the origins.

The industry we were in was fragmented. Before the formation of our company, to distribute around the world, OEMs had to find, qualify, and manage multiple suppliers for the same item. The business plan for us was to acquire suppliers in all key areas where the OEMs manufactured and become the first and only single source supplier.

The pain point we identified had to do with “time to market”. In the world of technical products, the first to market usually makes great profits, the second might do ok, but if you were slower to market, you almost never got sufficient traction to be a meaningful competitor.

To address this pain point, we needed to demonstrate that doing business with us was the most assured way of being first to market.

Our solution was to offer three ways we could serve an OEM. Or said another way, they could make choices about the “customer experience” they wished to have.

Shared Resources

For OEMs who did a small amount of business with us, typically less than $5M per year, we placed their business in a “shared resource” work cell. In this approach to serving them, their orders were manufactured using the same equipment and processes as other OEMs.

In this type of manufacturing, the first orders received are the first manufactured. In other words, an OEM’s order was placed in a queue.

Dedicated Facilities

For OEMs who could give us business from $5M to $15M, we would create a work cell dedicated solely to them. Dedicated work cells allowed us to create a “just-in-time” work flow.

When an OEM would place an order, we could ship it immediately. The work cell would be triggered by the shipment to create replacement products. This is also known as a “pull system”.

This was a much better customer experience. OEMs unfailingly made many shipments at the end of the quarter.

In the shared resource approach, the customer’s order triggered the creation of parts and pieces for their final assembly. This might take weeks to accomplish. With dedicated facilities, the pull system was able to continuously replace the final assembly.

Dedicated Facilities and Staff

The third customer experience was reserved for customers who would commit to more than $15M in annual purchases.

For these customers, we not only provided dedicated equipment, we added a dedicated staff. Our people became experts in our customers’ products.

This was clearly the choice most customers wanted to make.

Things We Had to Do Well

We had to be experts at designing and manufacturing cabinetry. The brightest engineers at a technical OEM wanted to be involved in the design, specification, and development of the OEM’s widget(s). Designing cabinets was not the best way to progress in your career at the OEM.

I recall one case where an OEM approached us to get “our drawings”, as chaos in their own engineering departments resulted in the loss of all the specifications. Our information became the restore point for re-creating their intellectual property.

Another way we facilitated the relationship was to have one “seat” of every major supplier of CAD software. We had our native system but did all the translation behind the scenes.

We also had to be good at implementing “revisions”. Technical OEM’s seldom freeze their designs.

To maintain our Level 5 status, we also did “bolt-on” acquisitions to the business for technical or geographic considerations. We acquired a facility in Austin, TX for example. By serving Applied Materials locally we were finally able to earn preferred supplier status.

To serve outdoor telecom customers, we acquired “thick” backplane capabilities. As customers included more sophisticated power supplies and other peripheral electronics, we acquired a company capable to produce the electronics.

We also had to become experts at “costing”. I recall a case where we produced a cabinet which sold for about $1,200. Our customer wanted us to purchase and install a $15,000 power supply. How to price this?

We developed a costing algorithm which took into account the inventory turns on a third-party item. If the third party could give us weekly deliveries, we could see 52 turns and be reasonable with our charges. If the lead-times were longer, our turns would be less and we would increase the amount of the handling charge for the item. It was a win-win approach.


Our biggest facilities were in Southern California. Because of their location, cost structure and business practices, they became the highest profit factories in the corporation.

We also won the biggest contracts in the industry.

In Retrospect

Both of these case studies were the result of a strategic plan led from the top. They were not an accident. They didn’t just happen by themselves. Senior management gave direction to the efforts.align social media - Strategic Customer Experience - Two Case Studies

In both cases, I know there was also strong alignment amongst the senior management team. There was almost no second-guessing about the “big picture”.

In today’s world there would likely be other enhancements to the customer experiences. Collaborative project management tools in the cloud would be part of the program. Orders, receipts, billings, quality reports, and other paperwork would be done with Electronic Data Interchange applications.

If done today, our email marketing and social media content would center on the customer experience which was intended. We would discuss the value of competing on the basis of lead-times, the simplicity of doing business with us, and the practices our customers should do to take the best advantage of our services.

Perhaps the biggest difference in the current business environment would be a shift to some form of a subscription business model. Increasingly, customers are looking for suppliers who adapt to this.

All the products and affiliated services would be packaged into a single monthly fee. If you need an office, Fast-growing WeWork is probably the leading example of the way businesses acquire and use office space in a subscription-based model.

Similarly, people who use technical equipment are buying the services from a subscription supplier like a network operating center.

If you can conceive a way to sell your product or service in a subscription model, you should be actively executing on a plan to move in that direction. If you don’t, it may not be long before a startup in your industry will build their brand around the strategy.

When Do You Know You Have a Completed Plan?

No plan lasts forever. Don’t adopt the mindset you that you can reach a point where you have the ultimate “customer experience”.

There is no such thing as a “completed plan” in the sense you are finished with the design of your process. The better way to think about it is to see it as something which is ever-changing to be better. There will be changes in technology which enable you to do different things and adjustments by your competitors.

Make it clear to your organization you are promoting continuous improvement, not the “flavor of the month”.

pic 292x280 - Strategic Customer Experience - Two Case Studies

About the Author: Bob Kroon is a coach for high-performing Founders, CEO’s, and Owners. He founded Expeerious, LLC ( in 2015 to exclusively focus on coaching the success of Top Executives. For over 25 years, Bob served variously as CEO, COO, Division President, and Group Vice President.

The majority of his career was in manufacturing durable goods. Bob is an enthusiast and practitioner of Lean Thinking since 1986. He also has broad skills in M&A including financial modeling, deal structure, diligence, and post-close integration.

Bob’s current clients are diverse and include businesses in healthcare, agricultural products, robotics, luxury goods, and education.

To learn more about how Bob coaches and thinks, you can find over 200 questions he’s answered on Quora. Visit his website at: for additional blog posts.

Ten Audiences Which Matter to Your Value Proposition

Are you speaking just to customers when you discuss your value proposition?

In my last post, I discussed the importance of clearly articulating your value proposition. Many who are reading this series of posts will conclude that the message, your value proposition statement, is intended for potential customers to create demand.

This may be your first motivation, and it may be a good reason for clearly telling the story about your business.

I would like to suggest a broader view. There are other audiences who benefit from clear articulation by the leadership of the business.

value proposition circles - Ten Audiences Which Matter to Your Value Proposition

The audience for your value proposition message is more than just potential customers.

The Audience on the Inside

Begin with the inside of your business. If marketing, sales, and operations teams listen to and observe the way you present the company and the problems you solve for customers, they will mimic your behaviors.

This is not exactly a new concept.

Early in my career, I worked for the Maytag Company. At the time, the company invested heavily in national television advertising with ads that featured “Old Lonely”. Old Lonely was the Maytag Repairman who was bored because he had nothing to do. The point of the campaign was to emphasize the reliability and long life of the product.maytag repair man - Ten Audiences Which Matter to Your Value Proposition

“Old Lonely” was a marketing campaign which could have been a Don Draper idea in a script for “Mad Men.

Every month there was an after-work event for the “Management Club”; as in “Mad Men” an open bar, and Maytag Blue Cheese and crackers.

When a new version of the ad was created, it was part of the agenda. Everyone in the company knew we had to live up to that reputation in the way we made everyday decisions. The story was being told on national television.

You can be sure that any business proposal which threatened quality trumped any decision which might save cost or be associated with another motive. Quality was always the top of the pecking order when it came to considering change. Visitors saw the testing labs, the inspection processes, and the engineering effort which went into maintaining the reputation of the company.

Customers and potential customers will always interact with people on the inside of your business. The greater the alignment in messages and behaviors, the more they will build their trust.

Your employees on the inside will appreciate the efforts you put into clear articulation. In many companies where articulation is unclear, employees, especially salespeople, will develop their own ways to present your story. The result is confusion and perhaps even contradictory messages.

The message also has a role in employee retention. When your employees believe you “know what you are doing”, they will buld pride in their company. Everyone likes to be associated with a winner. Your articulate value propostion will enhance that image.

The Audience on the Outside

Where do outsiders learn about your value proposition? The number one way in today’s business world is through your website.

The public view of your company on the outside is a message which goes to more than just your potential customer segments.

Visitors to your website may also include competitors, investors and lenders, potential employees, suppliers, partners, and others in your community.

For a big part of my career, I was heavily involved in new product development. This may seem counter-intuitive, but I noticed the more a competitor knew about something we were developing, the more likely they were to avoid copying our efforts.

I will admit that the most of our efforts were not exceptionally unique and not patentable (or worth the time, money, and effort). Our product development goals relied on pushing the volume of new products.

What intrigued me was the competitive behavior. Most people who want to be creative try to be “different”. There’s no personal satisfaction for a creative person to be a copycat.

The competition knew our value proposition and wanted no part in confronting us in a battle where our company strengths were in play.

Investors and lenders also do their diligence on your company. I’ve seen a number of situations where analytically a company was a good candidate for investment, but emotionally not a good candidate. Sometimes an investor or lender simply makes a decision based on gut feel. If your value proposition is clear, they will have confidence you “know what you are doing”.

Potential employees also want to understand your company. They want to know what it is like to work there. Does management give clear direction? Is it obvious what it takes to advance? Will this assignment look good on my resume?

Suppliers and/or potential suppliers also study your company. If they have a new product or service which they believe could benefit your company, wouldn’t you want to hear their pitch? Clearly stating your value proposition makes it easy for them to find you. If they really have something valuable, you could benefit from being an early adopter.

There may also be potential partners who are looking for you. Maybe they see your company as a way to distribute their product or service and want to create a revenue stream for both of you. Or maybe they see you as a potential acquirer.

You also want a good reputation in your community. Suppose you need agency approvals for something you want to do with your company. If you can be seen as an asset to the community, your chances for success can rise.

Selling Involves Everybody

Having all your audiences work for you is much better than simply relying on your sales team to grow the business. Consensus about your company’s strategies and business plan should be an ultimate goal of your communications efforts.

When You Betray Your Brand

I feel I need to add a postscript to this post. The Maytag story unfortunately has a sad ending. For over four decades the brand was associated with reliability. I don’t have any inside knowledge about what their management was thinking but I can tell you from personal experience, it became very hard to be a customer.

The Energy Policy Act of 1992, which mandated significant reductions in energy use in consumer appliances, had a big impact in the appliance industry. This legislation made older designs obsolete.

Apparently, the leadership at Maytag wanted to be first to market with products which complied. They introduced the Neptune Line of Washers and Dryers. Maytag’s washing machines were the flagship products for the company.

The previous products were based on a design platform which was first introduced in 1949. Over the years, most of the product changes were cosmetic. The functional way the appliances performed was unchanged. The heart of the product, the mechanical “works”, was manufactured in a factory which had been built during WWII to build military tank tracks.

So it had been decades since there was a design change of this magnitude. The new design platform was rushed to market. The culture at the Maytag I knew would not introduce a new product unless it was substantially better than the competition. Maytag might take years between launches. The Maytag Dishwasher, for example, was clearly a cut above anything else even though Maytag was a latecomer to the market.

Until the Neptune launch, I personally owned a Maytag Laundry Pair for over 25 years. I purchased them from “service school” at Maytag (lonely hearts club) where they had been disassembled and reassemble over 300 times. They lasted another 25 years for me.

Confidently, I purchased a Neptune washer and dryer, as I thought I knew what to expect.

I was wrong.

In a matter of a few years, I had 13 service calls. One of the last issues I had was a situation where a bobby pin fell through the soap dispenser and lodged in the impeller in the pump of the washer.

This was the final straw for me. I decided I knew enough about Maytag’s assembly techniques, that I could find the offending issue.

And I did. But I had over 300 components on the floor around me. I reassembled everything and “voila”, it all worked again. But I was now over-the-top angry and embarrassed I had ever bragged about the company to anyone. I wrote a letter to the president of the company expressing my embarrassment, especially with a defect which was clearly avoidable.

He never responded; probably had too many letters. Rather than being top-rated, Consumer Reports now had Maytag as a bottom rated company. It was no surprise their financial results deteriorated. A few years later Whirlpool bought the carcass of the company and now it exists merely as a brand with little equity.

Had the brand been known for low cost or another attribute, the quality story might not have had the same impact as I might have different expectations. But the fact that a brand known for high quality delivered low quality was a death knell for me.

Maytag, RIP.

pic 292x280 - Ten Audiences Which Matter to Your Value Proposition

About the Author: Bob Kroon is a coach for high-performing Founders, CEO’s, and Owners. He founded Expeerious, LLC ( in 2015 to exclusively focus on coaching the success of Top Executives. For over 25 years, Bob served variously as CEO, COO, Division President, and Group Vice President.

The majority of his career was in manufacturing durable goods. Bob is an enthusiast and practitioner of Lean Thinking since 1986. He also has broad skills in M&A including financial modeling, deal structure, diligence, and post-close integration.

Bob’s current clients are diverse and include businesses in healthcare, agricultural products, robotics, luxury goods, and education.

To learn more about how Bob coaches and thinks, you can find over 200 questions he’s answered on Quora. Visit his website at: for additional blog posts.

A Business Cost you can Influence

Are Costs of Customer Acquisition Controllable?

In the last two posts “Customer Acquisition when Revenue Growth is Stagnant” and “Two Important Metrics for Your Customer Acquisition Process”, I discussed the cost to acquire a customer. Should you consider this to be a fixed cost? Or is this a cost which you can reduce?

If you understand the importance of the ratio between the value of a customer and the cost to acquire a customer, then you realize that if you could reduce the cost of acquisition, you could grow your business by approaching smaller (i.e. lower value) target customers because you can maintain a reasonable ratio of value to cost.

In this post I would like to explore three factors which are underlying marketing drivers to your customer acquisition cost. These drivers interact and build upon each other. Furthermore, these are drivers you can influence, direct, and control in your business.


Bobs blog 8 first graphic with half circle - A Business Cost you can Influence

Add to your Value Proposition

Many businesses struggle with the expression of their value proposition.

In brief, your value proposition is what you do for your customer compared to the next best alternative. For most businesses, the alternative is a competitor. For a few, the value proposition is something which compares to a manual process; automation versus labor for example.

Another way of understanding value proposition is to ask yourself how life is changed for your customer by doing business with you compared to what they were doing before.

The strongest value propositions are those which eliminate a pain point, remove a hassle, or stop an aggravation for your target customer.

Value propositions can be emotional. They can simply make your target customer feel good about doing business with you. Products or services which serve a social good, for example, have “value”.

To lower customer acquisition cost, you can look for ways to add more to your value proposition. What does your target customer do just before or just after they use your product or service? Who else do they need to call? How easy is it to do business with you?

Another useful exercise is to identify all the key elements of the competition’s value proposition. Is there anything they do which you could add to your business model to obviate an advantage they have?

Practice Your Process

If you can repeat the process for acquiring a customer, your skills will improve. Each time you execute the process, you learn something and you can make subtle but important changes to the way you deal with every potential customer.

Visualize their experience. If they visit your business, where do they park? How are they greeted? What is the first thing they see? Is the first impression a mess or a dirty lobby? Tired plastic plants?

Figuratively, if not actually, prepare customer interactions like you would a script.

I worked with a business where we picked up customers at the airport with a clean, shiny Mercedes. We dropped them at the front of the business. They were greeted and immediately ushered to a conference room with a view where there was a tablet, a pen, and a bottle of water. People from the business interacted with them the same way for every visit. Everyone involved from the business knew their role and their deliverable to the process. We had a very high close rate on these customers.

In contrast, I have a friend who once visited a company and the person picking him up was drunk! Good first impression, huh?

When everything is scripted, you tend to avoid misalignment in your message. You leave customers with the impression you know what you are doing, you’re confident, and ready to serve them.

If your target customer is an enterprise employee, the value proposition for them might be “promotion to a better paying position”. What they don’t want is a decision to do business with you which backfires on them. They need success to be promoted.

Control Your Reputation

In the world we live in today, your reputation is largely controlled by what is said online. When people consider doing business with you, especially strangers, their searches are likely to bring up postings to places like Yelp, GlassDoor, and many other places which solicit comments.

If you have satisfied customers, ask them to give you reviews. Most are pleased to help.

Be sure all the online places where a target customer does diligence are in alignment. Your website, company pages on LinkedIn and Facebook and others should all say similar things.

Likewise, your personal profiles and those of your employees should all serve to “sell” your company.

Online presence is not new, but its importance continues to grow. Those who don’t use it are typically Baby Boomers … and they are rapidly leaving the business world. The next generations are drawn to online tools.

I recently posted a Yelp review for one of my clients. Admittedly this client is in an industry where you can be almost certain that everyone considering doing business does online diligence. Nevertheless, I was astounded that my review generated over 400 views in the first month after it was posted.

The only conclusion I can make is you would be prudent to control what potential customers find, and give them a lot to find.

Enhance your reputation by actively demonstrating expertise in your business. Blogs are one way to do this. Sharing relevant content from others can build your reputation. Likewise, hosting a “lunch and learn” for a customer is a very effective tool.

The Other Choice is …

If you have a weak value proposition, a chaotic way you handle potential customers and little or bad online reputation, do you think it will be easy to get new customers?


pic 292x280 - A Business Cost you can InfluenceAbout the Author: Bob Kroon is a coach for high-performing Founders, CEO’s, and Owners. He founded Expeerious, LLC ( in 2015 to exclusively focus on coaching the success of Top Executives. For over 25 years, Bob served variously as CEO, COO, Division President, and Group Vice President.

The majority of his career was in manufacturing durable goods. Bob is an enthusiast and practitioner of Lean Thinking since 1986. He also has broad skills in M&A including financial modeling, deal structure, diligence, and post-close integration.

Bob’s current clients are diverse and include businesses in healthcare, agricultural products, robotics, luxury goods, and education.

To learn more about how Bob coaches and thinks, you can find over 200 questions he’s answered on Quora. Visit his website at: for additional blog posts.