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
Business Edge Resources, LLCwww.bizedgeresources.com
Slide 2
Why Develop Products and Services?
• Help Customers
• Enhance stakeholder return
• Competition
Justification is Easy – Execution is Hard!
Business Edge Resources, LLCwww.bizedgeresources.com
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
Business Edge Resources, LLCwww.bizedgeresources.com
Slide 4
Product Environment Spectrum
Revenue Driven Solution Driven
• Different Characteristics• Different Focus Areas• Different Risks and Considerations
Business Edge Resources, LLCwww.bizedgeresources.com
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
Business Edge Resources, LLCwww.bizedgeresources.com
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
Business Edge Resources, LLCwww.bizedgeresources.com
Slide 7
Product Environment Spectrum
Revenue Driven Solution Driven
Different …but not mutually exclusive!
• Different Characteristics• Different Focus Areas• Different Risks and Considerations
Business Edge Resources, LLCwww.bizedgeresources.com
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
Revenue Driven Solution Driven
The customer voice can lead you tosustainable products
Business Edge Resources, LLCwww.bizedgeresources.com
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
Business Edge Resources, LLCwww.bizedgeresources.com
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
Business Edge Resources, LLCwww.bizedgeresources.com
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
Business Edge Resources, LLCwww.bizedgeresources.com
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”
Business Edge Resources, LLCwww.bizedgeresources.com
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