Ever had a product recalled by the manufacturer due to a defect?
It’s a pretty common occurrence no matter what industry is involved. Everything from kid’s toys to Jindee Cheese and cars with the recent Volkswagen debacle.
Product recalls can have a major impact on a business. One in four will not survive and simply go out of business. Others survive, but with major reputational damage and more often than not, heads at the top roll.
Given this you’d think manufacturers and distributers would recognise they need strategies to deal with recalls should they happen.
But as our client Steve Hather, one of Australia’s foremost product recall experts, has found out convincing an organisation to plan and be prepared for a recall is an uphill slog.
I’ll cover why in a moment, but first…
Over the last few weeks we’ve spoken about different types of selling situations you might face.
Here’s a quick recap. Click the links for more…
- Work Ethic: Quality vs. Quantity.
Do you make lots of quick sales vs. long term deals which could take months or even years to complete.
- Tolerance: High vs. Low.
Will you do whatever tasks necessary to get the job done – including stuff you dislike such as cold calling?
- Persuasion: Advisor vs. Pleaser.
Are you a born closer who naturally closes the sale or do you love “consulting” and never get the business?
- Executive Rapport: High vs. Low.
Can you naturally relate to people at the top or prefer dealing with the “common man”?
- Need: Create vs. Established.
Do your customers know they have a problem or do you need to create awareness first?
- Explanation: Obvious vs. Concept
Selling cars or houses is obvious. Selling performance improvement services is not.
Today we’ll cover the last couple – Need and Explanation with a bit of Executive Rapport thrown in.
There are three types of prospect. Those that already know they have a problem and want to fix it and those who don’t (yet). And of course those who are totally uninterested (the wrong market).
Targeting people who have no interest in your product is akin to shouting louder to be understood. Futile.
When Steve first came to us he was trying to sell product recall certification workshops to Quality Managers in large organisations. Akin to the ISO and Quality Tick Certification you see lots of companies go through.
Steve faced two issues:
- Quality Managers didn’t perceive a need for his service. To them everything was under control and they certainly weren’t going to raise doubts with upper management.
In short, they had too much to lose personally and no real upside gain.
- They had no decision making authority.
So who has the most to gain or lose if a product recall crisis occurred? If profitability and ultimately survival is at stake it’s the Chief Executive Officer and the Chief Financial Officer.
CEO’s want to grow their business while CFO’s tend to look out for financial risks and want to save money at every turn.
Remember, a product recall can cost a company hundreds of thousands of hard dollars. 25% of them fail to recover and go out of business. A CEO and CFO’s worst nightmare.
These individuals, not the Quality Managers have the most to gain or lose.
But product recall and crisis plans aren’t often on their radar until you bring it to their attention.
There is no established “Need”. So you must create one.
Then go on to explaining your solution and why they should take action choosing you to solve their issue.
One of the most powerful ways is using examples where competitors have fallen into the trap of not taking action and suffered major financial and reputational consequences.
As it happens sometimes the Gods smile upon us with great examples.
Fonterra, one of NZ’s largest dairy companies is responsible for over 30% of the world’s dairy exports.
And while they have great quality management practices, they’ve recently had a major debacle with a worldwide recall when botulism was found in Whey products.
Arguably as badly managed as the recent Volkswagen recall (when cars just stopped dead while driving and people were killed as a result), the recall trashed Fonterra’s reputation and cost the MD and two senior executives their positions.
Nothing convinces like real life. So I created the following piece which will specifically target the Managing Directors and Chief Financial Officers of Australia and NZ’s top 100 food producing organisations.
“Fonterra recently singlehandedly trashed New Zealand’s “100% Pure New Zealand” brand with the way they handled the recent Whey contamination crisis.
Could you be the next Fonterra?”
It goes on to talk about issues around risk mitigation and why they’re important in real world hard dollar terms. Terms that will make a MD or CFO sit up and take notice.
But a marketing piece is useless unless you can get it into the hands of the people who need to see it and are in a position to make financial decisions and act.
So we’re going to send this a “registered mail” and mark it “personal and confidential” so it gets opened by the MD and CFO personally.
Will it get opened? Absolutely.
Will they take action? More than likely. And we’ll increase the chances by following this up with more mail and phone calls.
By targeting the top Steve also covers another crucial point. Always target people who have something to gain or lose and are in a position to make buying decisions. See our article on Executive vs. Common Man here.
Then lead them to a buying decision by clearly articulating the value of your solution while proving that taking action is necessary. Your greatest competition is not “the competition”. It’s inertia.
So wrapping up here are the major lessons from this exercise.
- Targeting the right prospects is critical. They must have something to gain or lose if they don’t buy your product.
- Selling to someone who already knows they have an issue and wants to solve it is far easier than educating your market and exposing a need.
- Figure out who the decision makers are and target as high as required in an organisation.
So if you’re in a similar position to Steve and want to improve your sales results, we can design a marketing and sales process which will actively target people who are a good fit for you. People who will see the value of what you provide and will want to take action as a result.
Call us on (02) 9499-7958 to get started.