Monday, July 19, 2010

Part 1: Products & Services: The Disconnect

When it comes to disconnects I do not think a larger one exists than the one between a company and its customers when it comes to perceptions regarding products and services. Of course there are many spectacular exceptions to this rule. Disney is an example that immediately springs to mind. Apple is another. But more on that later.

So what do I mean by disconnects? How can two people or groups of people possibly disagree on something as tangible as a product or a service? True marketers will know what I mean. As well as that select group of true entrepreneurs. But for the rest of us who assume that it is Marketing's role just to order brochures and organize trade shows, and who think that successful entrepreneurs just "got lucky," pay attention.

For this discussion I am going to focus on Products although the same would apply to Services. And by the time I am finished hopefully you will see that there is no real difference between the two in terms of what matters most to your customers.

The Definition of a Product:

To start with in order to "understand" your Product it is first necessary to define it. Just as any scientist will tell you any subject from a newly discovered life form to a theory to explain the origin of the universe must be labeled or defined using a common language that everyone understands.

By way of example I will use a product from a now defunct company that used to produce tooling for the automotive industry. Yes this would be the same company I wrote about when describing the evolution of the PODs. For those of you not familiar with this company's product let me review. The company produced stamping dies that are used by automobile manufacturers to produce metal parts ranging from tiny brackets up to entire body panels. The dies are placed into presses ranging in size from small to massive. And flat pieces or coils of metal are fed into the press while the die opens and closes. By forming and trimming the metal in a precise manner the flat metal is "formed" into parts to be used to make cars.

For the tooling company to start to gain market share, focus improvement efforts, and generally deploy its limited resources (manpower, machines, material and money) in the best way possible, it was necessary to start by understanding its Product.

To get the ball rolling various people within the company were asked to come up with 25 Attributes to describe the company's Product. The following are examples of the Attributes that people from Sales & Marketing, Engineering, Design, Purchasing, Operations and Logistics came up with:

1) High quality
2) Tooling expertise
3) 3D design capability
4) Ability to produce any type of die (hand transfer, progressive, etc.)
5) On-site tool try-out capabilities
6) Company owned delivery trucks
7) Large and experienced workforce
8) Low Canadian dollar
9) Ability to respond quickly to engineering changes
10) Best in class tool packaging and distribution capabilities
11) Ability to produce prototype parts
12) Ability to product Checking Fixtures
13) Large 90,000 square foot manufacturing facility
14) Knowledgeable Program Managers assigned to each project
15) Highly experienced tooling engineers.

and so on....

When the data was collected and duplicate Attributes were combined we were left with over 100 distinct descriptors that could be used to describe elements of our Product. Incidentally we added another dozen or so that no one inside the company had even thought of after speaking with our customers.

The Disconnects:

As soon as the list was distributed within the company the disconnects were immediately apparent. Most could agree with the "quality" and "experience" related Attributes. But few in the Engineering department considered the ability of the Program Managers to be a Product Attribute. And no one in the company, except those in Shipping and Receiving, considered how well we packaged the tools before sending them out on trucks to have any relevance at all.

But we were on our way towards understanding exactly what our Product was.

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