Executing A Configurable Product Strategy

June 22, 2015

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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.


Customization doesn’t bring efficiencies

September 17, 2012

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.

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

March 19, 2012

“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” 16AUG10

August 16, 2010

“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.


Dave Gardner’s “Thank God It’s Monday” 19JUL10

July 19, 2010

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

This week’s focus: configurable products and services

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?”

Companies that thrive will offer selling tools that are better aligned with customer needs than their own needs.

Read the entire blog post: “How to excite a la carte customers.”

Thought for the week:

“If everything seems under control, you’re not going fast enough.” – Mario Andretti

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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

July 13, 2010

Customers expect companies to offer more than a “one-size-fits-all” product or service. The à la carte customerTM 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

June 7, 2010

“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

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.