Developing and Marketing Products and Services for Commercial and Industrial Customers

Business Edge Resources, LLCwww.bizedgeresources.com

Slide 1

Developing and Marketing Products and Services for Commercial and Industrial

Customers

April 19, 2006E Source

Major Accounts Service Summit

Annotated and edited presentation to utility key account managers


Slide 2

Why Develop Products and Services?

• Help Customers

• Enhance stakeholder return

• Competition

Justification is Easy – Execution is Hard!


Slide 3

Competing Market Factors

• Business Environment– Energy is small % of costs– Essential input– Fastest growing indirect cost

Understand both environments - find the intersection

• Utility Environment– Risk aversion– Stakeholder Return– Rate Cases and Regulated Returns– PUHCA

Top-of-mind strategic issue but may still be a

lower priorityRisk and return go

hand-in-hand


Slide 4

Product Environment Spectrum

Revenue Driven Solution Driven

• Different Characteristics• Different Focus Areas• Different Risks and Considerations


Slide 5

Revenue Driven

• Characteristics– Product Management Orientation– Uniform product or service– One-to-many relationship

• Focus– Efficiency– Cost control

• Risks and Considerations– Can be effective in target rich environments– Prone to assumptions– Staffing

“Here’s your answer. What’s your question?”

“Track and Maintain”

Lifecycle Management


Slide 6

Solution Driven

• Characteristics– Project Management Orientation– Custom solutions– One-to-one relationship

• Focus– Flexibility – Measured growth– Customer relationship

• Risks and Considerations– Blindness to market opportunity– Staffing

“Market Myopia”

“Build and Launch”

Solution Developer


Slide 7

Product Environment Spectrum


Different …but not mutually exclusive!

• Different Characteristics• Different Focus Areas• Different Risks and Considerations


Slide 8

Evolving the Product

By evolving products from a customer, you –

• Respond to a defined and articulated customer need first• Keep costs in line with revenues• Avoid (or at least reduce) the risk of market assumptions• Have more control over internal and external expectations


The customer voice can lead you tosustainable products


Slide 9

Strategic Solution Development

Customer

Describe the painDefine the “box”

Account Manager

Actively ListenTranslate

Initiate

Marketing

Constructively listenCollaborate

Innovate

Delivery

DesignBuild

Commission

Let customers drive product development

QualityCheck

ValidationCheck

OperationalCheck


Slide 10

Turning Solutions into Products

• Validate the solution

• Deconstruct the concept

• Unique or shared pain?

• Uniform or highly customized?

• Business Case

Conclusion Jumping is not a Sustainable Strategy


Slide 11

Context for Listening

Constructive listening means stepping out of your business and into your customer’s

Know your strengthsKnow your weaknesses

Know your competenciesKnow your relationships

Then listen


Slide 12

Educating the Customer

• Convey value in their terms

• Speak to the audience– Decision Makers– Advisors– Operators

Best sale? Customer buys without you needing to “sell”


Slide 13

Lessons Learned

• Reliance on others to make numbers

• Reliance on partners for delivery

• Key Account Managers• Understand how the

customer buys• Manage Expectations• Add value

More than a hand shake – requires

mutual commitment

Don’t underestimate the value of due

diligence

You’re not alone – use your product managers with

customers

What is the process? Who is

involved? What are the criteria?

• Under-promise and over-deliver

• Captive customers not enough – need captive demand

• Don’t abandon too early

• Don’t retain for wrong reasons

Don’t expect huge margins by being a

markup on a markup

Documents

Developing and Marketing Products and Services for Commercial and Industrial Customers