Market Research is Essential Prior to Capacity Investment Decisions

What To Do When Your Company Reaches Capacity Limits? [People, Facilities and Equipment]

Status Quo Strategy

You selectively determine what sales opportunities to pursue in order to optimize available capacity.

This short-term strategy will lead to trouble mode and storm clouds will eventually appear on your horizon.

If market research proves a total available market that is growing or significantly higher than your available capacity, then status quo is a high-risk strategy.  When your market share declines you will become a higher cost producer in your category.  This opens the door to growth mode competitors who will become more attractive to your customers and employees.

Growth Strategy

You aggressively pursue all sales opportunities that match your ideal customer profile.

If market research proves a total available market that is growing or significantly higher than your available capacity, then lower your risk by implementing a growth strategy to maintain or increase your market share.  You will improve your position as a low-cost producer in your category.  This will spell trouble for your competitors as you become more attractive to their customers and employees.

If you opt to invest in more capacity in order to elevate a key aspect(s) of your business, you will also need to invest in skill development, process enhancement and productivity tools in order to capitalize on your growth opportunities.

Market Research Competency Is Essential

Without the appropriate market research competency [in-house or external], you won’t be able to make objectively correct capacity investment decisions.

By John Bernardi

Expand Your Comfort Zone To Leapfrog The Incumbent

Meeting The Chairman Of The Board Is Outside The Comfort Zone Of Most Sales Reps

Following A Well Planned Account Development Strategy Will Earn This Right

Search for self-confident business leaders and influencers whose personal response mode is either growth or trouble.  Avoid even keel or euphoric buyers and people who want to place you in a box where your value and ideas will be squashed.

Recruit a coach within the customer organization who will help you to tailor your value proposition to address the business, application and political obstacles you’ll be facing.

Introduce yourself early in their new application buying cycles as a valuable educator and problem solver.

Display a willingness to share account position with the incumbent.  When you confidently believe that you have consistently exceeded customer expectations, you have earned the right to adjust your account plan from a divisional strategy to an indirect strategy that changes the ground rules from which customer value decisions are made.  This will set you on a new course to becoming the incumbent.

My example: As a national account manager, I was responsible for a growth mode F500 customer where we shared a niche position with two other vendors.  I recognized how far we had to go in order to be considered a true competitor to their primary vendor who owned the account relationship and $120 million in annual sales.  After eliminating the secondary competitors and owning the $1 million niche, my next goal was to penetrate the core business.

My solid reputation for facilitating an excellent customer experience [and for business acumen and product and industry knowledge] that I had developed in the niche area established strong horizontal and vertical relationships throughout their company.  My internal customer coach guided me in the right direction. I believed that I had earned the right to meet their chairman of the board.  I approached him directly to let him know about the value we were providing to his company.  I knew that he loved to play golf.  He accepted my invitation to play on a nearby world class golf course in an event that I organized where he’d play with my company president and senior executives from my company were paired with his company’s senior managers who were amazed that I was able to make this happen.

This set me apart from all other vendors who would never think to go outside their comfort zones to this degree.  VP level decision makers felt more comfortable allowing my company to share business with their long-time incumbent since their chairman opened the door to a reduced risk decision.  This set the stage for my company being awarded a $15 million contract that in the past would have been a natural add-on for the competition.  From that point forward, the incumbent considered my company as a legitimate foe to be dealt with in this account. [They even tried to hire me.]

By John Bernardi