Executing A Configurable Product Strategy

If your company manufacturers capital equipment or systems, I’d like you to pause for a moment and seriously consider how easy it is to:

• Create a quote
• Book a clean order
• Plan the materials for an order
• Build the order
• Install the order
• Support the order
• Know that the order will be profitable

For most companies, there is a big need for improvement. Is your company in that situation?

Do you need help making the complex simple? I can help you with this.

Photo Credit: Alison Christine, Flickr.com

Thought for the week:

“Tell me and I forget; teach me and I may remember; involve me and I will learn.” – Confucius

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What do you think? I welcome your comments!

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Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

© 2015 Gardner & Associates Consulting  All Rights Reserved

Note:  This posting is based on my weekly “Thank God It’s Monday” that helps you and your company thrive! To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

Getting Configurable Product Orders Right

A reader wrote: “My company has configurable products and we are having problems getting the right parts delivered to support installation of the customers’ orders. What ideas do you have to resolve this?”

The first question I would ask is did the process for shipping custom, configurable orders ever work well? If you answer “yes,” then you need to ask yourself “what changed?” If you answer “no,” then it would be clear you never had a working process and that is your starting point.

If something in the process changed, you need to take action to bring the process back into compliance so it works properly and is repeatable.

If nothing changed, you need to create and follow a process that ensures you are shipping the right parts to complete the order.

If the answer you receive is, “it’s too hard to do it right,” then I encourage you to look at the problem through the eyes of your customers and/or dealers. If your customers and/or dealers are experiencing challenges satisfying the customer the first time, that negatively impacts your brand reputation.

When order execution goes poorly, people talk about it. If you don’t believe that, just look at Yelp, Facebook or Twitter to see how brand reputations become tarnished. Companies delivering a poor customer experience aren’t long for this world.

Finally, you may need to innovate your current process to meet the needs of your business if variety and complexity has gone beyond the capabilities of your current systems and processes. This is how you accelerate growth.

Photo Courtesy of John Hritz on Flickr

Thought for the week:

Heard through @coryedwards

81: The % of US consumers that say that it is important that brands make my life easier.#DigitalDopamine from @razorfish

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What do you think? I welcome your comments!

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Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

© 2014 Gardner & Associates Consulting  All Rights Reserved

Note:  This posting is based on my weekly “Thank God It’s Monday” that helps you and your company thrive! To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

Make It Easy And Simple

Note: This posting is based on my weekly “Thank God It’s Monday” that helps you and your company thrive!

This week’s focus: make it easy and simple

One of the lines in my “why” I’m in business statement is:

ease and simplicity replace frustration and complexity

If something in your business is frustrating and has far more complexity than it should, the one question you have to ask yourself is when are you going to tackle that issue so you can create ease and simplicity for everyone impacted?

I helped a client with a front-end sales process for a highly-configurable product. It would take 1-3 hours on the phone to configure, price and quote a customized product. The CEO said they’d been living with this issue for 20 years. The pain wasn’t just on the customer side. It would take months to train new sales people to handle those calls.

Which areas should you consider for making it simple? Any customer facing area that has either more frustration or complexity than it should. Where are customers experiencing pain dealing with your company?

• Getting quotations
• Booking orders
• Executing orders correctly and on time
• Post-sales customer service and support
• Ensuring that any and all customer expectations are properly set and met

If you take action to eliminate important areas of frustration and complexity with ease and simplicity, this will accelerate your company’s growth.

Thought for the week:

“The project that most scares you is the project you should do first.”  – Robin Sharma

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What do you think? I welcome your comments!

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Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

© 2013 Gardner & Associates Consulting  All Rights Reserved

Note:  To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

Super Bowl 47 Winners and Losers

Note: This posting is based on my weekly “Thank God It’s Monday” that helps you and your company thrive!

This week’s focus: Super Bowl 47 Winners and Losers

Congratulations to the Baltimore Ravens for a terrific season and Super Bowl victory. Well played.

Winners: Beyonce, Alicia Keys, Jennifer Hudson & The Sandy Hook Choir, the Jeep ad with Oprah Winfrey honoring those who serve in the military, the Dodge Ram ad with the late Paul Harvey honoring farmers, the Best Buy ad with Amy Poehler, the Budweiser Clydesdale ad, and, finally, the Taco Bell ad about senior citizens partying. Bravo!

Losers: San Francisco 49ers, the New Orleans power grid.

The Big Loser: Go Daddy for an uncomfortable, pointless, brand-damaging ad. I’m no prude, but personal displays of affection such as that depicted in this commercial are despicable and made me and my wife cringe. I turned away from the TV. In working with a client last year, I found Go Daddy to be professional and competent. This ad undermines Go Daddy and its brand. While Go Daddy’s goal may have been to get people talking about their brand, I’m not sure they will get a positive outcome they were looking for. They certainly face an uphill battle attracting female entrepreneurs to use their services. And, I wouldn’t use them for any reason.

So, some advertisers thrived and others crashed and burned. And, so it is every Super Bowl.

Thought for the week:

“The bad news is time flies. The good news is you’re the pilot.” – Michael Althsuler

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What do you think? I welcome your blog comments!

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Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

© 2013 Gardner & Associates Consulting  All Rights Reserved

Note:  To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

The Continuum For Configurable Products and Services

Note: This posting is based on my weekly “Thank God It’s Monday” that helps you and your company thrive!

This week’s focus: configurable products and services

There are few things based on absolutes. Most principles exist on a continuum. People with food allergies have varying degrees of adverse stimulus response to the same allergen. Customized, configurable products and services are no different–they, too, exist on a continuum.

Not every product or service has to be a 10 in terms of feature or option quantities or complexity to be successful in the marketplace. Providers of configurable products and services are in charge of setting and managing their own continuum.

The decision made today about how configurable to be doesn’t have to be set in stone. The continuum can change as the market changes and evolves or as your capabilities and ability to manage and offer configurability evolve.

Configurable product and service providers already know that they aren’t in a “one-size-fits-all” world. It follows then there is no “one-size-fits-all” answer about the degree to which your products and services have to be configurable. The key is to hit the marketplace sweet spot. This will help you thrive.

Thought for the week:

“Fear less, hope more;
Whine less, breathe more;
Talk less, say more;
Hate less, love more;
And all good things are yours.”
– Swedish proverb 

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What do you think? I welcome your blog comments!

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Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

© 2012 Gardner & Associates Consulting  All Rights Reserved

Note:  To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

Scaling Business for Configurable Products and Services

Note: This posting is based on my weekly “Thank God It’s Monday” that helps you and your company thrive!

This week’s focus: configurable products and services

If your company offers configurable products or services that are complicated to sell, you will lose out on sales opportunities and, ultimately, undermine growth if you don’t have an appropriate guided selling solution.

Too many companies view selling inefficiencies as a “cost of doing business” and fail to address this need before the company hits the wall. The issue boils down to being able to efficiently configure, price and quote based on a customer’s unique requirements using configurator tools provided. If it’s too hard, too complex, or takes a disproportionate amount of selling time, your sales team and channel will not invest the time and energy.

How do you know here are storm clouds on the horizon? Subject-matter experts are required to hand-hold sales, dealers and/or customers through the configure-price-quote process. You rely on people rather than an appropriate tools. Your current process isn’t scalable and won’t perform as the business grows.

If your company is acquired by a company, the acquiring company and its channel partners may quickly turn-off to selling your product undermining the growth potential and value for both companies if you haven’t provided an appropriate guided selling solution. Remember, in a large, diverse company, your value proposition is but a few line items of a larger company’s offerings. You compete for mind share. If you make it easy, you win. If it’s hard, you lose.

If you are experiencing these challenges, isn’t it time you invested in correcting this so you, your dealers and sales people can thrive?

Thought for the week:

“This Veterans Day (November 11th), let’s thank all those who have served our nation in uniform and remember those who made the ultimate sacrifice.” – U.S. Senator John McCain

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What do you think? I welcome your blog comments!

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Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

© 2012 Gardner & Associates Consulting  All Rights Reserved

Note:  To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

HP Reeling from Oct12 Shareholder/Analyst Call

Wall Street and analysts are reeling from HP’s Shareholder/Analyst call yesterday. The stock hit a 9-year low yesterday. Meg Whitman and HP are signaling it’s going to be another couple of years before the company is back on track. That’s astounding.

I have to ask at what point in the last decade was HP truly “on track?” What does “on track” look like?  I don’t think HP really knows.  HP simply knows it’s off track.

One quote stood out yesterday:

 When Todd Bradley took over the Printing and Personal Systems business, he was surprised to find that we made more than 2,100 laser printers. In every business, we’re going to benefit from focusing on a smaller number of offerings that we can invest in and really make matter. By the way, we have plans to cut those laser printer SKUs by about — by nearly 50% in 2013.

Cut it in half in 2013?  I can’t imagine the lack of economies and negative supply chain implication of having 2100 laser printer SKUs. This is an incredible number.  To think that they will have to continue with that number for the better part of another year is puzzling. And, to think they hope to only cut it in half in 2013 means they’ll still have over 1,000.

How about cutting it by 75-80% from the current 2100.  How about looking at a strategy to reduce the number of SKUs by modularizing the products?  This would mitigate supply chain and channel distribution issues.

There’s more that’s troubling.

• For one, a “year” doesn’t need to be the smallest time unit for change to occur. In many businesses, a month or a quarter is sufficient to get a lot accomplished if people are motivated. HP needs to tighten up its timelines dramatically.
• The longer it takes to make critical changes in a business, the less likely the things essential to moving the needle on the business  will occur. Where is the sense of urgency?
•  HP leadership doesn’t have 2-3 years to ease into the changes. Investors won’t tolerate slow, steady progress. We’ll get another regime change and be right back talking about what needs to happen.
• There is really no proof that HP knows what the right things to do are and has a plan to execute.
• Cutting and downsizing–while necessary–won’t improve morale or the culture at HP. What is the plan to energize the team, customer, channel partners and the marketplace?

For too long, HP has just been going through the motions. What I heard yesterday is that will continue albeit with slightly more urgency.

Something’s got to give. I don’t think HP knows what that is yet. Where will HP be in a year?  Still stuck?

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

Customization doesn’t bring efficiencies

Note: This posting is based on my weekly “Thank God It’s Monday” which is offered to help companies thrive!

This week’s focus: configurable products and services

Being a “customizer” doesn’t create efficiencies. More often than not, customization brings tremendous inefficiencies in sales, order administration, engineering, manufacturing operations, service, etc.

• Your team is forever chasing experts to answer and resolve normal, routine configurability questions that arise.
• You require significant human intervention to accommodate complexity and variety simply because information isn’t available–the business isn’t set up properly.
• Your team is challenged to pull together quotes for products and services that can actually be delivered.
• Your team is challenged by the fact that nothing is standard; everything is a special.

Companies must evolve their business processes to cost-effectively meet the challenges product and service complexity bring. If customizers don’t take action to improve efficiencies, they will continue to suffer margin and operational challenges that only mount.

Failure to address these challenges will keep you and your company from thriving.

Thought for the week:

“Don’t confuse enthusiasm with commitment.” – Paul J. Silvia

What do you think? I welcome your blog comments!

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Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

© 2012 Gardner & Associates Consulting  All Rights Reserved

Note:  To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

Dave Gardner’s “Thank God It’s Monday” 19MAR12

“Thank God It’s Monday” is to help companies thrive!

This week’s focus: configurable products and services

Why is it so many companies that offer configurable products and services are so ill-equipped to deal with the customer-facing side of the business? Here are 3 key reasons:

• When the business started, the focus was on the product, not on how products would be configured, priced and quoted–the processes never caught up

• The inefficiencies and operational challenges are seen as a “cost of doing business”

• Your ERP system is optimized for a different business paradigm: mass production

The result is margin leaks–margin leaks amounting to 3% or more of revenues. How much is that costing your company year after year in real dollars?

What if you could add 3% or more to your bottom line? How would that change the valuation of your business? How would more effective processes favorably impact customer relationships and your customer’s experiences?

The cost of correcting these problems is trivial compared to the annualized cost of the problem. Solving this problem will help you and your company thrive.

[Note: Here are self-assessment tools to help you determine where your company stands.]

Thought for the week:

“If everyone is thinking alike, then somebody isn’t thinking.” – George S. Patton

What do you think? I welcome your blog comments!

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Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

© 2012 Gardner & Associates Consulting  All Rights Reserved

Note:  To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

Dave Gardner’s “Thank God It’s Monday” 20FEB12

“Thank God It’s Monday” is to help companies thrive!

This week’s focus: configurable products and services

Increasingly, customers expect to be able to influence the products and services they buy.

For low-end consumer goods, e.g., food products, items you would tend to find at large retail chains, etc., mass produced products meet the essential consumer need. However, there are niche product areas where the ability to tailor the end product is valued and appreciated.

For higher-end products and services, the provider must offer some degree of choice. The days of a “one-size-fits-all” solution satisfying market need are behind us. And, of course, the challenge for the providers becomes containing costs as variety increases.

Is there an enthusiasm gap between what you offer and what your customers expect and want? If there is an enthusiasm gap, it is incumbent that your organization to close the gap if you expect your organization to thrive.

Thought for the week:

“So innovation has to be appropriate for your business. It must fulfill a need, and it must give you an edge over your competition.”

– Sir Richard Branson, Business Stripped Bare

What do you think? I welcome your blog comments!

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Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

© 2012 Gardner & Associates Consulting  All Rights Reserved

Note:  To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

Dave Gardner’s “Thank God It’s Monday” 09JAN12

“Thank God It’s Monday” is to help companies thrive!

This week’s focus: configurable products and services

Is it all about your company–the product or service provider–or all about your customer?

If it’s all about your company, watch out! Someone will come along who is better focused on the customer and take market share from you.

How can you tell if it’s all about you?

There’s friction in the marketplace between what your company offers and what your customers really want and expect from your company.

Friction will keep your company from thriving.

Thought for the week:

“Brands exist as a means of communicating what to expect from a product or service–or to highlight the family likeness between different products and services. An established brand on a new product is a guarantee that what you’re getting will be, in its own way, like something you’ve enjoyed before. “ – Sir Richard Branson, Business Stripped Bare

What do you think? I welcome your blog comments!

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Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

© 2012 Gardner & Associates Consulting  All Rights Reserved

Note:  To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

Product Configurator, Configure, Price, Quote Top Challenges

Based on my experience, a few of the top pains include:

* Not approaching this challenge holistically across the enterprise–the configure-price-quote (CPQ) process is disconnected from back-office processes

* Focusing on CPQ as a back-office process rather than a tool and process to engage customers

* Not establishing a product management function that owns the evolution of products and product lines

* Not creating and engaging cross-functional product teams who own the success and profitability of a product line

* Thinking the product configurator technology is going to solve all the problems

* Selecting inappropriate product configurator technology

* Continuing to “engineer-to-order” rather than pre-engineering around product modularity and offering previously rationalized choices within a coherent system for CPQ

* Not having a sustainable, scalable process for adding new features and options

* Trying to be all things to all people leading to an unprofitable or low margin business that is not sustainable while you hope that things will get better–hope is not a strategy

* Not having and engaging in a strategy to drive down the cost of variety

I write about this in my book: “Mass Customization: An Enterprise-Wide Business Strategy” available at Amazon.com. You can read more about it at www.happyabout.com/mass-customization.php

What do you think?

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

© 2011 Dave Gardner

Dave Gardner’s “Thank God It’s Monday” 18JUL11

“Thank God It’s Monday” is to help companies thrive!

This week’s focus: configurable products and services

Since 1999, I’ve had a vision that, after configuring a product, up would pop a 3-dimensional image of the product reflecting the exact order configuration that could be turned, rotated, entered into, etc.  That product could be an automobile, a vehicle, a home, a ship, an airplane–you name it!

My vision is now a reality and it will be a game-changing differentiator for early adopters.  The process for configuring, pricing and quoting highly-configurable products has finally moved into the 21st century.

If your company offers highly-configurable products that require one or more drawings to help your customer understand their order configuration, contact me and I’ll show you how your company can thrive in a way that you, too, may have only dreamed about.

Thought for the week:

“It’s usually a dirt road that leads to the diamond mine.” – Mike Dooley

What do you think? I welcome your blog comments!

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Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

© 2011 Gardner & Associates Consulting  All Rights Reserved

Note:  To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

Dave Gardner on customization and personalization

Dave Gardner was interviewed by Dr. Amy Vanderbilt on her TrendPOV show titled Market of One–Using Individualization For Advantage to discuss customization and personalization, how to use it effectively to dominate your market, and how not to lose your profits by customizing the wrong way.

Here’s the link to the interview.

What do you think?

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

Viability of Offshore Manufacturing

Issue raised on LinkedIn:

I am working on my Research Project as a part of MBA Curriculum. Title of my research project is “DOES OFFSHORE MANUFACTURING STILL MAKE CENTS?” The purpose of this project is to research and document the continued viability of off-shore manufacturing to primarily Asian countries and evaluate if time has come to return back to the United States or North America. I have come up with some questions for my project. I would appreciate if anyone can comment on some of my below questions:

1. What are the real costs components of off-shore manufacturing?

Costs that are often missed are the engineering and administrative costs associated with supporting sub-contract manufacturers. Traditional cost accounting distorts cost and potential savings as significant non-manufacturing costs aren’t included in cost accounting metrics. What a company should really concern itself with is total cost associated with getting a product into and sustaining it in the marketplace. Activity-based costing is a better approach for looking at total cost and the performance of a product or product line.

2. As companies have moved their production off-shore, have they realized all the costs savings they expected? If not, why?

I submit this is a bit like the estimated mileage sticker on a new car–the savings is never quite as good as it appears to be after you’ve purchased.

3. Can United States become a manufacturing power house again?

The U.S. is a power house today in manufacturing! No need for doom and gloom. Not all manufacturing segments are moving off-shore. Those that have moved likely will not come back. There is greater growth potential for higher-end, personalized or customized products to begin to expand with the U.S.

4. How can companies keep their manufacturing operations at home and still compete with the competitors who absorb the overseas risks?

It depends on the segment as I’ve written above. Dell, for example, has moved a lot of manufacturing out of Round Rock, Texas, to other parts of the U.S. and the world. But, as I will write in a Fast Company article in a few weeks, Dell has not reduced its office footprint in Round Rock and actually continues to create more, higher-paying jobs for knowledge workers in Round Rock than it previously paid manufacturing employees. I recently interviewed the Vice President of Corporate Social Responsibility, Trisa Thompson, about this and other issues. Dell has just announced that it is expanding in Silicon Valley, again with product development and knowledge workers. [Note: I am member of Dell’s Customer Advisory Panel, a position for which I receive no compensation.]

5. Do you think that government needs to provide some type of incentives to improve manufacturing competitiveness in North America and encourage companies to return manufacturing on-shore?

As we have seen with “green” industries, investors are loathe to invest in industries where the U.S. government offers incentives. The fear is that the market dries up when the incentives are pulled. So, we need to be careful about how the government participates. The U.S., state and local governments as well as foreign governments offer incentives to lure companies to create jobs in their area–this is routine and expected. This also allows companies to shelter profits outside the U.S. in many instances.

What do you think?

Dave Gardner, Gardner & Associates Consulting
http://www.gardnerandassoc.com

© 2011 Gardner & Associates Consulting  All Rights Reserved

Dave Gardner’s “Thank God It’s Monday” 16AUG10

“Thank God It’s Monday” is to help companies thrive!

This week’s focus: configurable products and services

A small business owner contacted me about needing a configurator system to handle his anticipated volume of business.  He wants to spend “as little as possible” to resolve his mission-critical challenge.

His business is about configuring, pricing and quoting configurable pump systems. His prospective dealers have told him that they might fail without an effective configurator tool.

The business owner has focused on the product design and product features, not the support system required to seamlessly drive the business from quote to cash.  In this instance, the support system is as important as the product itself.

Why are companies with configurable products reticent to invest in critical infrastructure so their businesses will scale?

A go-to-market strategy and budget must address critical infrastructure as well as the product or service. Businesses that thrive anticipate and address all challenges in their go-to-market strategies pro-actively.

Thought for the week:

“I’ve never made a secret of what gets me out of bed in the morning. It’s the challenge.  It’s the brand.” – Sir Richard Branson in Business Stripped Bare

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Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

© 2010 Gardner & Associates Consulting  All Rights Reserved

Note:  To receive an email version of “Thank God It’s Monday” to start your week, please subscribe here.  I would very much appreciate your suggesting to others that they subscribe.

Privacy Statement:  Our subscriber lists are never rented, sold, or loaned to any other parties for any reason.

How to excite a la carte customers

Customers expect companies to offer more than a “one-size-fits-all” product or service. The à la carte customer^TM wants to be in control of what they buy. A prospective customer wants to know what is available, at what price and, if we’re talking about a manufactured product, how long it will take to produce.

Traditionally, companies with configurable products and services build and maintain elaborate, electronic menus—often referred to as “configurators”—that describe the array of options available. Many companies offer so many choices that prospective customers are overwhelmed leaving them to wonder, “Where do I start? How do I begin to understand what product or service is appropriate for me?” For example, Dell’s website, dell.com, offers a vast array of choices yet does not go far enough in helping a prospective customer converge on the best solution based on their individualized needs.

Most companies discuss their products and services using industry-centric language which may align poorly with the language and expertise of the prospective customer. If a prospective customer doesn’t understand a company’s lingo, there’s going to be problems. Here’s an example.

Imagine you have just arrived in Malaysia and you are taken to a local, traditional buffet. You know nothing about the food you see. Some things look like insects, some things look raw—you are going to have many questions. There will be language differences that make it difficult to communicate with your local host. There will be a lot of “yeses” and head nodding but you wonder, “Did she really understand that I can’t tolerate anything spicy? When she tells me it’s not spicy, can I trust she understands my definition of ‘spicy?’” It is no different speaking to a prospective customer who does not possess expertise about your products and services.

If a company does a poor job of helping prospective customers make appropriate choices through its selling tools, it forces the prospective customer to speak with someone to help them figure out what to buy or, worse, turns the prospective customer toward competitors who more effectively help an individual decide what they need to buy.

Sometimes, a prospective customer will connect with a knowledgeable sales agent and, at other times, the customer will speak to a sales agent who knows little more about the company’s offerings than the prospective customer. The prospective customer has no means to determine the skill and expertise of the sales agent taking their call. If the product or service doesn’t meet the customer’s expectations, the customer may never buy from that company again. The unhappy customer is likely to share their negative experience with others.

Most configurators fail to offer what prospective customers really need. What are the best practices that companies of configurable products and services must employ in next-generation configurators?

• The configurator needs to be assistive to the prospective customer and the sales agent. Prospective customers require more than a “product selector” or “service selector” as traditional configurator solutions are presently constituted. Prospective customers need much more than an elaborate menu presented with little guidance about how to order or configure a product or service tailored to their individualized needs. Consider the trusted advisor role a waiter satisfies in a high-end restaurant—the waiter provides guidance and expertise to help the customer order a wonderful meal from a myriad of possibilities.

• Configurable product and service providers must offer guided selling solutions that teach a prospective customer how to buy based on the essential mission or application required of the product or service. To do this requires matching customer-required attributes with attributes inherent in certain products and features.

• Prospective customers need to know they are selecting the appropriate product or service based on attributes they have previously been prompted to provide. It is far better to fit the solution to the customer’s actual needs than let them buy something based purely on price that will disappoint them later.

• Configurable product and service providers need to provide different entry paths to help a prospective customer converge on a solution—the tools must help the novice or infrequent purchaser as well as the expert.

• Prospective customers need to have the opportunity to learn about products and services they never dreamt existed, creating excitement and engagement.

Has any company created what I call the “next-generation configurator?” Not that I am aware of. Most companies that have implemented configurators have done what I call Version 1.0 but need to be thinking about Version 2.0.  Version 2.0 offers companies an opportunity to distance themselves from the competition.

These best practices for offering and presenting configurable products and services via next-generation configurators will turn customers into committed, raving fans. That’s exciting!

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

© 2010 Dave Gardner

Dave Gardner’s “Thank God It’s Monday” 07JUN10

“Thank God It’s Monday” is to help companies thrive!

This week’s focus: configurable products and services

An information technology department contacted me seeking assistance selecting a new configurator software package.

My response:  before we can talk about the technology, I first need to understand your business and your business requirements as well as the needs of your customers and channel partners.

• What is the immediate problem that needs to be solved and how can I help the client create a compelling vision for the future that is implementable?
• Are they looking to create a “me too” solution or a game-changing solution that solidifies their position as a market leader?
• Do they want to make an incremental improvement or do they have time to make a huge impression on their marketplace?

Getting an appropriate configurator system will ensure a company thrives. Conversely, selecting the wrong system will take a company to a deep dark place they will soon wish they had never entered.

Thought for the week:

“Courage is being scared to death – but saddling up anyway.” John Wayne

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Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

© 2010 Gardner & Associates Consulting  All Rights Reserved

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Self-Assessments: Configurable Products and Services

I have developed self-assessment tools for product manufacturers and service providers to look at their business execution for their customized offerings.

These tools can be used by individuals or in group meetings to understand the current state of the business.  They may identify gaps and could result in rather spirited debate if discussed at an executive staff meeting.

To access the PDF version of these self-assessments, please click the appropriate link below:

Configurable Product Self-Assessment

Configurable Service Self-Assessment

I would love to hear your reactions to these tools.  Please contact me via email at info (at) gardnerandassoc.com

Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

© 2010 Gardner & Associates Consulting

Best practices for selling and producing customized, configurable products

The best practices for selling and producing customized, configurable products are:

• producing a customized product on demand,
• for a specific, named customer,
• based on the order attributes specified by the customer (or their representative) within an online tool offered for that express purpose,
• after receipt of an actual order, and,
• a customized product is produced with the same efficiency as one would expect from a non-customized (or mass-produced) product.

Most manufacturers of customized products produce them under sub-optimal business processes. We often find that the sales, dealer and customer side of the business are not well aligned with the back office creating tremendous inefficiencies, errors, rework and order delays. We work with clients on the front end of the process and, when indicated, on the back office processes as well.

The inefficiencies come with a considerable cost.  Industry experts estimate a customizer’s inefficiencies nominally cost 1.5-3.5% of gross revenues year after year and sometimes much more.

Many customizers experience low single-digit profits that they are constantly challenged to attain or even maintain as the cost of variety increases which further erodes profits.  There is nothing worse than working your tail off to make almost no profit quarter after quarter, year after year.

To realize enterprise-wide efficiencies, I have long advocated that manufacturers offering configurable products look at this business challenge holistically. I apply a holistic approach with my clients.

If you are a customizer, isn’t it time you implemented a solution that improves efficiency and profits and delights your customers as well?

Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

© 2010 Gardner & Associates Consulting