GAP - Barrier or Opportunity?

Q.
GAP between a buyer and a seller remains as challenges in closing a deal. Is it a barrier or an opportunity?

A.
In a normal relationship, GAP is not something that we long for. Generation GAP for example, is an obstacle in a parent-children relationship.

Similarly, when GAP exists between two persons, business is hard to conclude and usually, it ends up as a fell out. Worse case scenario, they could become enemies.

So, in normal circumstances, GAP is a barrier. NOT an opportunity. When there is GAP, there is bad news.

In market place, when a GAP is apparent between a product and its market, it means the marketing unit has a lot more to do. BUT, isn't it the way we face everyday?

Of course, your boss wants to achieve a higher sales target this year. There is a big GAP of expectation! Yet, it is a job which employs you! Without this GAP, you got no job!

So, GAP exists everyday and everywhere, and it is because there is different level of expectations. Hence, there are big GAPs and small GAPs. This GAP exists, and therefore, effort in marketing and sales are to meet this expectations. It thus generates opportunity for employment.

Business Strategy

Business environment never stay still. There are always changes. For example, the dynamics of pricing, competitors and economic conditions. GAPs are everywhere. So, organizations rise and fall, and yet time and tide wait for no man! So, organizations with better tactics and implementation will thrive.

Strength and Weaknesses

Because of these GAPs and the limitation of one person to close all these GAPs, organization develop strategy to cater for the best fit as a TEAM. Therefore, organization studies its strengths and weaknesses They try to combat the GAP expectations by choosing a better battle to fight, saving resources and money. You just cannot win all!

Long term CORE COMPETENCE

In so doing, the organization looks into its core competence. This may be one or two areas where there is better chance to close the GAP. The ability to close the GAPs (into the future) makes the system of the organization successful. This system is in time becomes "Culture" of the organization. The culture can include "Innovation" or "Resilience to failures".

Develop the technique to narrow the GAP

Human cannot keep on battling the odds. That is why we develop machines. As GAPs keep on appearing, we develop computers. Hence, in the game of closing the GAP, better computerization should enhance the ability of human to sustain the winning strategy into the future.

This system, is what is called "strategy" in business or "applications" in information technology or "set of working rules" in the backyard factory. It could deliver the core competence of the organization and takes it into the future. So, that comes with the analysis of competitors and other reasons why the business is not sustainable.

Due to competitors, for example, VCD business.is replaced by internet. It has become a thing of the past as people move on to subscribing Internet TV through UNIFI.

So, in Estate Agency, agents survive because of the GAP. Agents sell expertise in bridging the GAP. Yet, to sustain this strategy of "middle man", you need to ensure you can offer the value over a longer period of time versus your competitors.

Scenario

Seller's agent - Increase value of seller's property. Buyers would be willing to part with their money to buy property of Seller because you show Value of the property to the Buyer. You closed the GAP.

Sustaining the Value Proposition

Estate agent delivers comparison of properties so that Buyer has knowledge of the benefit in acquiring the property. Estate Agent explains about capital gain and rental yield. This knowledge must be able to sustain into the future. Thus, the competitor will not match the knowledge (Value) perceived to benefit the Buyer. When another platform is able to offer that value to the buyer directly (e.g. Internet database like Brickz), then the GAP is narrowed. There is no point a Buyer were to look for an Estate Agent to meet up with the Seller. The buyer can narrow the GAP himself. In this case, by Googling in the Internet!

However, amidst all these, selling a property is much much better than say, selling a hand phone.

People could learn about almost anything and everything about a brand of hand phone by Google. The buyer can just go online to buy the cheapest hand phone of that particular brand and model. The information is not a barrier in this case. It is a perfect competition - you get information about hand phone to almost 100% accuracy by Googling. In fact, you would know more in learning via Google than speaking to the salesperson of the hand phone store!

However, real estate market is not in perfect competition. Nobody can be certain about value of a property and its potentials, or worse, its pitfalls. There is no two property exactly the same. So, there is always a GAP between a Seller and a Buyer. The Seller would want his property best you can think of. And, the Buyer would be worried that if it is over priced or worse, is it even a scam???

To be able to offer VALUE INFORMATION, you will be better of than the another agent in the market. In this way, you will then be able to protect your business over a longer period of time.

It is indeed, the ART of showing off your VALUE INFORMATION.

Then, what is VALUE INFORMATION??? Read further here on Data - Gap - Value Information.

Customer Relationship Management Q3

Q. (Also posted in My-RealProperty1)

a) Explain briefly the term "customer relationship management". (5 marks)

b) Discuss the strategies for creating value for customers and capturing value from customers in return. (15 marks)

(20 marks, 2012 Q3)

A.
Customer relationship management or CRM “is the process of managing detailed information about individual customers and carefully managing all customer ‘touch points’ to maximise customer loyalty”

Kotler & Keller (2006) p 252.

A customer touch point refers to an occasion when a customer interacts with the organisation, e.g., an inquiry, a sale, receiving a piece of mail.

Other meaning of CRM can be:

“CRM is a term for methodologies, technologies and e-commerce capabilities used by companies to manage customer relationships.

Stone and Woodcock, 2001.

The best and easiest to remember is this definition of Customer Relationship Management:

"The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction."

Ref:
All the above definitions of CRM were among many given in http://www.iuc-edu.eu/group/sem1_L2/2012%20MBR/9061%20Lecture%2013.pdf
http://www1.uprh.edu/drgarced/merc3115/powerpoint14th/pom_14_inppt_cap01.pdf

b) Strategies for creating value for customer and capturing value from them in return.

Refer to

"strategy for customer satisfaction"

Ref:
Earlier posts.

MIS in creating value for Customer Relationship Q5

Q. (Also posted in My-RealProperty1)

a) Discuss the relevant parts of the marketing information system that a company must design to create customer value and stronger customer relationships. (10 marks)

b) Discuss the steps in the marketing research process which could be applied for the development of a proposed housing scheme. (10 marks)

(20 marks, 2012 Q5)

A.
a) MIS to create customer value and stronger customer relationships.

This is Customer Relationship Management System (CRM), a data collection system that could store and analyse customer data.

In short, company adopt a management information system to collect all the customer data. As data is collected and grouped into various categories, the analysis of it can yield valuable marketing information, for example, potential customer demographic (age group), educational level, likes and dislikes and income brackets. In this sea of data, customer contact like telephone number, email address and where they stay can be stored. Periodical mailing of product information and even questionnaire can be done on them, further producing marketing research information.

With all the information gathered and studied, the company design products best satisfy the customers. This can improve satisfaction level and increase customer relationship and loyalty. Long term customer relationship management can result in goodwill and strong brand loyalty thus increasing in life time purchase and customer equity of the company.

b) Marketing Research Process in new housing scheme.

Ref:
Own Account with reference to Strategic CRM for Customer Satisfaction.

Strategic CRM for Customer Satisfaction

Q. (Also posted in My-RealProperty1)

Discuss the strategies for creating value for customers and capturing value from customers in return.

A.
Steps in marketing process:

Step 1 Step 2 Step 3 Step 4 Step 5




Let's start the discussion by stating that the marketing process has arrived at a value proposition. This means:

"Set of benefits or values a company promises to deliver to customers to satisfy their needs."

And, it has been arrived at with much deliberation in the earlier steps of marketing process - namely the Study of environment and identify needs (Step 1) and Coming out with a strategy (Step 2). Now, it has come to Step 3 where a strategy needs to be designed to delight the customers - Action Plans.

This value proposition has to be delivered to the customers, and fulfilling their needs, sustaining the value so that they remain as happy customers. This is in the nutshell, creating value for customer and capturing value from customer in return.

Hence, the first strategy is to satisfy the needs of the customer in the marketing mix, ie pricing has to be right (value for money), product should satisfy the needs (build strong brand), right way of distribution channel (supply chain) and ensuring the marketing communication reaches the target audience with the right message of value proposition.

The next step - Step 4 is customer relationship management. Largely, strategies like special pricing for returning or existing customers, gift point system, special club membership, etc are employed in building strong customer relationship and keeping them delighted.

Customer Relationship Management or CRM Software are being deployed in studying customer purchase pattern, income categories, demographics and their likes and dislikes. Ancillary products and support services like insurance together with housing loan are examples of partnering bundles between different financial institutions. Other examples are like first 12 months of UNIFI subscription free with purchase of the "Smart Home". After sales service can be incorporated with cross selling of specialist products for the renovation of homes, including home appliances, furniture and other partnership with downstream industries.

Lastly, the capturing of value from customer as a long term goodwill and reputation for the company. This process is usually done by periodical emails and phone calls to study customer's satisfaction with the product bought. It is part of the "after sales service" but it is much longer for property developers as similar customers may purchase properties again for investment or up grade after medium term of a few years.

This step in the marketing process is aimed at creating life time customer value and satisfaction, making them spokesperson for the company, and increase market share of the company among the targeted customer group. It is especially so in the telecommunication sector as continual support for customer satisfaction would increase the length of stay with the same operator (loyalty) and therefore results in more profit for the company - increase in total customer equity.

Ref:
Own account from:
Chapter 1 Marketing: Creating and Capturing Customer Value. 2012 Pearson Education, Inc. Publishing as Prentice Hall. Available from http://www1.uprh.edu/drgarced/merc3115/powerpoint14th/pom_14_inppt_cap01.pdf

Elements of Customer-driven Marketing Strategy & Mix Q2

Q. (Also posted in My-RealProperty1)

(a) Describe the elements of customer-driven marketing strategy and mix. (15 marks)

(b) Elaborate the forces that can influence the above strategy. (5 marks)

(20 marks, 2015 Q2)

(27.09.2015)
A.
a) Similar question has been asked on customer-driven marketing strategy in:

2013 Q4 - companies move away from mass marketing towards target marketing, firms are focusing on the buyers who have greater interest in the best values they have created. Discuss the steps in designing a customer-driven marketing strategy.

[Here, the question asks about elements of and marketing strategy and mix. However, the key elements are still about segmentation, product positioning for such segment and continuous customer relationship management.

The marketing mix to develop such strategies would be product, promotion - to the target segment, and pricing to target segment and placing the distribution to enable the reach to target segment.]

Elements of a Customer-Driven Marketing Strategy, by Chris Joseph, Demand Media is extracted below:

In a highly competitive business environment, focusing on the needs of your customers can give you an edge over your competition. As such, your marketing strategy should be geared toward reaching those who would benefit the most from your product or service. A customer-driven marketing strategy includes elements like identifying your target market and reacting to their needs. It should also detail ways to retain customers and use them to help you gain additional business.

Targeting Your Market
A customer-driven marketing strategy targets a specific market segment. Use marketing research to identify common demographic characteristics within your customer base, such as age, gender, occupation and income level. The more you know about your customer base, the easier it is to develop a strategy that will appeal to these characteristics. As a result, you waste less time and money trying to reach unlikely prospects.

Meeting Needs
A customer-driven marketing strategy focuses on meeting the needs of your customers and examines how your products or services can meet those needs. For example, your initial research may tell you that your customers are extremely interested in receiving a high level of service. You may be able to meet this need by offering free deliveries or extended hours of operation.

Building Loyalty
Customer-driven marketing helps to build loyalty, which can lead to repeat sales as well as referral business. One method used by marketers is the implementation of a rewards program where customers receive points each time they make a purchase. The accumulation of points leads to free or discounted products or services.

Using Customer Feedback
Use feedback from your customers to make changes or improvements to help you continue to meet customer needs in the future. For example, your customers may indicate that they want a cleaner store, a different product mix or a better customer return policy. Make any necessary changes and use your marketing strategy to get the word out to show that you're focused on serving your customers.

Gaining Referrals
Make generating referrals a part of your customer-driven marketing strategy. Encourage your existing customers to spread the word about your business to gain new customers. Implement a referral program where customers are rewarded for sending new business your way by giving them additional discounts or free merchandise. You could even hold a contest to see which customer can send you the most referrals in a specific amount of time.

[The later parts about building loyalty, using customer feedback and gaining referrals are under Customer Relationship Management (CRM)].

Ref:
Chris Joseph. Elements of a Customer-Driven Marketing Strategy. Demand Media, available at
http://smallbusiness.chron.com/elements-customer-driven-marketing-strategy-3223.html
[X] Own account.

b) Forces that influence the strategy

[Take for example of a strategy for reducing road accident by installing CCTV camera for speed trap. The strategy is using CCTV camera to reduce speed, thus less accident. In the context of this question, the strategy is using Customer-Driven marketing strategy and mix, the end outcome is to market to a segment of customers where their behaviour is largely similar hence, penetration to segment to achieve acceptance.

This segment of customer is actually the environment which the marketer has selected based on earlier market research and analysis. However, this environment may change over time. Therefore, the assumptions that certain action plan could be effective earlier on might be obsolete later. This causes or 'forces' are what is asked by the question.]

The Marketing Environment - The company must carefully analyze its environment so that it can avoid the threats and take advantage of the opportunities. The company’s marketing environment includes forces close to the company that affect its ability to serve consumers.

These forces can be dynamic and further market research may be required to identify them for better adaptation of strategy.

They are:

1. Demographic pattern which changes over time - people gets older hence behaviour might change

2. Technological advancement - the replacement of analogue phone by smartphones

3. Political or policy changes - rules and laws prohibiting certain use of product

4. Entry of competitors - new way of doing things, My-Teksi etc.

(The forces are those that can affect the environment - like the PEST factors)

Ref:
[X] Own account

Core Customer and Marketplace Concepts Q1

Q. (Also posted in My-RealProperty1)
(a) Elaborate on the five (5) concepts for:

(i) Core customers

(ii) Marketplace concepts. (20 marks)

(b) Explain the importance of understanding these concepts. (5 marks)

(25 marks, 2015 Q1)

(23.09.2015)
A.
Similar question was asked in:

2013 Q1 - explain five (5) core customers and market place concepts.

The difference in this question is that it is (i) Core Customer and (ii) Marketplace. Hence, the perspectives of the 5 concepts involving customer side and marketplace side are discussed in separate sections.



(a)
(i) 5 concepts on the Core Customer side.

1. Needs, Wants and Demands
Customers have needs, wants and demands for certain product or services. These desires to be fulfilled is what makes the buying and consuming of goods and services. In fact, when a need is backed by buying power it becomes demand. This is the most important concept from the point of view of customers. Without the needs, wants and demands, the activity of production, manufacturing selling and marketing would be meaningless.

Take an example of a nomadic tribe, there is no demand of a permanent house. Hence, from the perspective of the tribe, selling permanent housing to them does not fulfill their needs, wants and thus, they do not have demand for houses.

2. Market Offerings (Choices of Products)
From the customer's perspective, market offering is an array of choices. In the myriad of choices, customers are blurred with what they really need, want or demand.

Hence, the concept of market offerings in the perspective of consumers is about nearest choice. What is the most matching choice would be the right fit for the demand. Without the right marketing offerings, the consumer would likely wait, and consider the next best choice.

For example, when a customer is looking for a sofa and a bed, if a combined Sofa-Bed is attractive and cheaper, the consumer may choose to buy this new product.

Another example is when consumer is flying AirAsia for holidays, they may be attracted to buy the package of Flight with AirAsia and Accommodation at Tune Hotel. This is fueled by the attractive choices in the market offerings.

3. Value and satisfaction
The phrase 'customer first' is really at the core of this concept. Customers make satisfied clients and enable future referrals easier because of the perceived value proposition. A satisfied customer is a customer who will return and consume more. As the value perception is sometimes emotional, and intangible, the correct customer's value perception must be captured. This will then identify the type of product or services that can meet the needs, wants or demand of the customer.

For example, a retailer who seldom go out would not likely buy a car. However, if he perceives the value of a car being his status, and requires it to impress a girl. Then the value perceived of the car is not of transportation. It may be perceived for his emotional need to satisfy a girlfriend.

4. Exchanges and Relationship
This concept is at a higher hierarchy of needs - recognition and emotional satisfaction.

Customers may be seeing the Value and satisfying needs and wants. However, another part of customer's buying satisfaction is the relationship of exchange, trust and confidence.

Take for example, you can buy from a nearby pharmacy some health supplements but you choose to drive 5 kilometers away to get it from the pharmacy that you like. Why? Because of low price? It might not be cheaper but more expensive! Nevertheless, you like to buy from your trusted pharmacist because of the rapport and professionalism in him.

This part of the concept of marketing is about feelings, trust and communication of ancillary needs. Like the above, the need may be health supplements, the value may be professional opinion, the ancillary needs may be trust and long term relationship.

5. Markets
From the customer's perspective, the various relationships of exchanges for the satisfaction of his many needs constitute a place for the congregation of sellers and service providers. This congregation is a market or markets of various goods and services.

For example, a housewife who cooks for the family goes to the wet market to buy necessities like meat, vegetable and rice. In the same market there are also sellers of other groceries like soap, washing powder and even clothing. Hence, the concept of a grouping of sellers of related items come together to satisfy the greater scope of needs of customers. This is the concept of market from the perspective of customer needs.


(ii) 5 concepts on the Marketplace side.

1. Needs, Wants and Demands
Marketplace exists to satisfy the needs, wants and demands of certain product or services by the consumers. The market over time comes to a dynamic of evolution of new products to satisfy the ongoing change of taste and requirement of the consumers. There is then, different substitutes of products for fulfilling the same needs, wants and demands. These are the competitions. The competition are introduced to better satisfy the needs, wants and demands of the consumers.

Take an example of a nomadic tribe, there is no demand of a permanent house but the market may introduce a type of tent. Hence, from the perspective of the market, there is a creation of new product to meet the needs, wants and demands.

2. Market Offerings (Products)
The Marketplace continually evolve to introduce new products and create needs, wants and new demands for consumers.

This can be seen in the ICT industry. The evolving ICT industry always have new products replacing old ones. Take for example, the handphone replacing the old house phone and the mobile computers replacing the desktops. The Marketplace constantly introduce market offerings to entice consumers with ever changing taste and needs.

The concept of market offerings in the perspective of marketplace is about innovation of new products which fulfills better the needs of consumers, giving another (better) choice to the prospective customer.

3. Value and satisfaction
Marketplace concept of marketing is more about identifying the right target audience and fulfilling the target value mix of this group of consumers.

For example, a marketplace for cars would sub-specialize in various types of cars. They can be sport cars, luxury sedan, family van - MPV, or mini compact vehicles. This marketplace sub-categories tends to satisfy the different segments of the market who view value and satisfaction of needs, wants and demand in quite different manners. Varieties and cost-benefits of the marketplace is geared to consumer satisfaction and value propositions.

4. Exchanges and Relationship
Marketing concept on relationship is largely by customer relationship management (CRM). This is a concept in Marketplace where the customer who is satisfied with the experience of good product from the seller would be kept for returning sale or referral to other new customers. Below are links to various postings on CRM.

2012 Q3 - Customer Relationship Management
Capturing value from customers in return

Take for example, a satisfied customer of a chain pharmacy would always return to the same pharmacy. Moreover, he would refer his relatives and friends to buy from the trusted pharmacy as confidence and product assurance is of paramount importance in this business.

5. Markets
Marketplace is the market. The market is a place where goods and services are presented to prospective customers. There are competitors, direct substitutes or quite similar products of nearly similar use competing for the same customer. How well it is able to provide solutions to the consumer is the key success factor of the marketplace. The market has to be dynamic to offer the satisfaction to the customers who are evolving over time.

For example, a housewife who cooks for the family goes to the wet market to buy necessities. The Marketplace is the wet market. They are various sellers in the marketplace, competing among each other for the buyers. The marketplace has to evolve to serve the customers. There may be needs of more comfort while shopping, hence better infrastructure of walkways. Then, the hypermarket concept came into existence. Shoppers can get almost anything and everything at low cost in the hypermarket, from groceries to electronics and furniture, all under the same roof.

(b) Importance of understanding these concept.

Grouping all the 5 marketing concepts into interaction and execute the plans requires much study. Hence, the advent of the profession of 'Marketing'.

Marketing

Marketing involves serving a market of final consumers in the face of competitors. The company and competitors research the market and interact with consumers to understand their needs. Then they create and send their market offerings and messages to consumers, either directly or through marketing intermediaries. Each party in the system is affected by major environmental forces (demographic, economic, natural, technological, political, and social/cultural).

Each party in the system adds value. This value satisfies the customers. Satisfied customers built relationships, and repeat sales as well as more referrals.

Ref:
Mubina Kazi. 2012. RelivingMBAdays. Available at,
https://relivingmbadays.wordpress.com/2012/08/12/five-core-customer-and-marketplace-concepts/

CRM & its barriers Q7

Q. (Also posted in My-RealProperty1)
(a) Define the Customer Relationship Marketing (CRM) concept. (5 marks)

(b) Elaborate the barriers for implementing customer relationship marketing (CRM). (20 marks)

(25 marks, 2016 Q7)

A.
a) Definition of CRM

Similar question was asked in

2012 Q3

"The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction."


b) Barriers for CRM implementation

Further reading:
Refer to my answer in another posting here.

Customer Relationship Management (CRM) is a subset of Marketing. Customer Relationship Marketing is "Relationship Marketing", and is should not be abbreviated as "CRM".

Below answer is extracted from Atul Parvatiyar &  Jagdish N. Sheth (2001).

CRM Implementation Issues 

One of the most interesting aspects of CRM development is the multitude of customer interfaces that a company has to manage in today’s world. Until recently, a company’s direct interface with customers, if any, was primarily through sales people or service agents. In today’s business environment, most companies interface with their customers through a variety of channels including sales people, service personnel, call centers, Internet websites, marketing departments, fulfillment houses, market and business development agents, and so forth. For large customers, it also includes cross-functional teams that may include personnel from various functional departments. Although each of these units could operate independently, they still need to share information about individual customers and their interactions with the company on a real-time basis. For example, a customer who just placed an order on the Internet and subsequently calls the call center for order verification expects the call center staff to know the details of his or her order history. Similarly, a customer approached by a sales person unaware of the fact that the customer had recently complained about dissatisfactory customer service is not likely to be treated kindly by the customer. On the other hand, if the salesperson was aware of the problem encountered by the customer, the complaint, and the action already initiated to resolve the complaint, the salesperson would be in a relatively good position to handle the situation well. Therefore, effective CRM implementation requires a front-line information system that shares relevant customer information across all interface units. Relational databases, data warehousing, and data mining tools are thus very valuable for CRM systems and solutions.

The challenge is to develop an integrated CRM platform that collects relevant data input at each customer interface and simultaneously provides knowledge output about the strategy and tactics suitable to win customer business and loyalty. For example, if call center personnel cannot identify and differentiate a high value customer and do not know what to upsell or cross-sell to this customer, it could mean a tremendous opportunity lost. Although most CRM software solutions based on relational databases are helping share customer information, they still do not provide knowledge output to the front-line personnel. As shown in figure 4, the CRM solutions platform needs to be based on interactive technology and processes. It should assist the company in developing and enhancing customer interactions and one-to-one marketing through the application of suitable intelligent agents that help develop the front-line relationship with customers. Such a system would identify appropriate data inputs at each customer interaction site and use analytical platforms to generate appropriate knowledge output for front-line staff during customer interactions. In addition, implementation tools to support interactive solutions for customer profitability analysis, customer segmentation, demand generation, account planning, opportunity management, contact management, integrated marketing communications, customer care strategies, customer problem solving, virtual team management of large global accounts, and measuring CRM performance would be the next level of solutions sought by most enterprises.

Unfortunately, in their enthusiasm to implement CRM solutions, some companies seem to be overlooking the basic considerations that would make such initiatives successful. Since CRM implementation comprises a significant information technology (IT) component, these companies have often handed over the responsibility of CRM implementation to IT Departments. In this way, they become focused on simply installing CRM software solutions without developing a CRM strategy or program. This leads to creating an operational tool within the company, but the usability and effectiveness in producing desirable results from such tools can be limited. CRM tools are valuable when they are used to identify and differentiate individual customers and to generate individualized offers and fulfill customized solutions. The lack of a CRM strategy or CRM programs would leave the front-line people without any knowledge of what they should be doing with the additional customer information that they now have access to. Those applying themselves and developing improvised solutions could find that their ad hoc solutions backfire and cause unintended deterioration in customer relationships. Hence, it is important to consider the CRM process framework in its totality. CRM tools are meant to supplement a company’s strategy for building effective customer relationships. Appropriate strategy and excellent implementation are both needed for obtaining successful results. In the future we expect to see more research on the barriers to implementing successful CRM strategies as well as empirical research on the impact of CRM on company performance.

Ref:

Atul Parvatiyar & Jagdish N. Sheth. Customer Relationship Management: Emerging Practice, Process, and Discipline. Journal of Economic and Social Research 3(2) 2001, 1-34.

Sales Force and CRM Q6

Q. (Also posted in My-RealProperty1)
(a) Identify the six (6) major steps in sales force management. (15 marks)

(b) Discuss the roles of the company's sales person in creating value for customers and building customer relationships for a property development company. (10 marks)

(25 marks, 2016 Q6)

A.
a) Sales force management

Similar question was asked in

2013 Q7

The six major steps are:

1) Designing sales force strategy and structure: [In case of five (5) steps, this step is omitted]
2) Recruiting and selecting salespeople
3) Training salespeople
4) Compensating salespeople
5) Supervising salespeople
6) Evaluating salespeople

Ref:
Earlier post.

b) Creating value for customers and building customer relationships

Readings below are referred.

Strategic CRM for customer satisfaction
2012 Q3

Below are examples of CRM in a property development company.

1. WhatsApp group - for announcement of launching, show house and exhibition.
2. Emailing (e-blast) - periodically sending progress on site news, launches, weekend open day.
3. Facebook - news on progress and activities on booth & sales galleries, Expo and Open days.
4. Flea Market - organize weekend activities like food trucks, dance classes, at property sites (completed property only) to attract current customer and potential customers (buyers and tenants).

Ref:
Earlier posts.

Barriers to implementing CRM

Q. (Also posted in My-RealProperty1)
List out the barriers in implementing Customer Relationship Management (CRM).

A.
Firstly, CRM stands for Customer Relationship Management, not Customer Relationship Marketing.

However, some people use these two terms interchangeably. I personally do not agree. CRM is a management tool. It is a method. Relationship Marketing is not a tool, it is a concept.

8 barriers to success in CRM software.

In summary, the barriers are:

1. Problems with Integration and Adaptability. No company is the same.
2. Resistance to Change.
3. Failure to See Benefits.
4. Lack of Guidance or Leadership.
5. Low Skill Level.
6. Lack of Accountability.
7. Using the Wrong System.
8. Terrible Data. 

The above article is about barriers in implementing CRM Software. CRM can also be a manual system. It is however, synonymous with a data base organiser which communicate periodically with the customers.

Hence, the issue is what data base, and for what effective outcome. Be it software or manual system, the end objective is to establish a good relationship with the customers, based on the data of these people.

To illustrate this point, what is data? We use a scenario to illustrate this. Data of patient age group. Selling a medication to patients who requires weight management/weight loss programme, for example.

Barrier would be:

Sales team does not only see that age group. There are people outside the age group who are being sold the weight loss programme. So, the data will be useless as these out of range data are not captured in the CRM data base.

But, to a salesperson, any potential consumer of the weight loss product is a customer, irrespective of the age. Thus, the salesperson might not rely on the Data from CRM at all. The new customer is not being included into the data base, although being captured as a sales. Even when the programme is successful in other age group, it is not entered into the CRM.

By right, this out of range age group should be told to the management and leadership decision should be sorted out and create a new age group in the CRM. Though key to the success of the CRM system, this is a trivial issue to the sales team. As they don't see this as impacting their sales, hence they might not even bring this up to the higher management.

Over time when the sales team does not see the usefulness of the system. They would not be interested to input the data into the CRM system anyway. It only add more work for them. Then, the system is not reflective of the composition of customer base. Thereafter, the data become obsolete.

In the above example, you can see the barriers involved are:

1. Problems with Integration and Adaptability - new CRM system not reflective of the ground issue that other age group are also customers.
2. Resistance to Change - the sales team resisted to implement CRM effectively.
3. Failure to See Benefits - the sales team did not see the benefit of sending messages to potential clients. They rely on their personal skill in calling on the prospects.
4. Lack of Guidance or Leadership - CRM is not being implemented collectively because the leader in the sales team did not work together with the staff of CRM. They did not address the out of age group issue in the deployment of the CRM system.
5. Low Skill Level - obviously sales team is not computer system specialist who can alter the CRM system.
6. Terrible Data - over time, the CRM data is not reflective of the actual ground level customer base.

It is indeed a tremendous effort to run a successful CRM system in some industries. Especially industry where product is distinct and customer base is limited defined.

For, you have such a well defined customer base, it is so limited in number, therefore the purpose for CRM is minimum. Example of this type of industry is high-tech highly specialist product like selling heavy machineries or MRI machines.

CRM is good for fast moving consumer goods (FMCG) with wide base of customer. Then, they can capture wide range of customer behaviours and streamline them to achieve more focus promotion over a longer period.

In industry where repeat sales is very uncommon, CRM is also not very effective. You would not expect the same purchaser of property will purchase in next 12 months. This can be intergration or adaptability barrier.

Ref:
Own account.
https://www.plusconsulting.com/Blogs/Lists/Posts/Post.aspx?ID=66

Digital Strategic Planning - what is it all about?

Q. (Also posted in My-eBikin)

What is Digital Strategy? What is then Digital Strategic Planning?

A.
A digital strategy is a form of strategic management and a business answer or response to a digital question,[1] often best addressed as part of an overall business strategy. A digital strategy is often characterized by the application of new technologies to existing business activity[2] and/or a focus on the enablement of new digital capabilities to their business[3] (such as those created by the Information Age and often as a result of advancements in digital technologies such as computers, data, telecommunications, Internet, etc.).

As is the case with its business strategy parent, a digital strategy can be formulated and implemented through a variety of different approaches.[4] Formulation often includes the process of specifying an organization's vision, goals, opportunities and related activities in order to maximize the business benefits of digital initiatives to an organization. These can range from an enterprise focus, which considers the broader opportunities and risks digital can create and often includes customer intelligence, collaboration, new product/market exploration, sales and service optimization, enterprise technology architectures and processes, innovation and governance; to more marketing and customer-focused efforts such as web sites, mobile, eCommerce, social, site and search engine optimization, and advertising. 

The planning to carry out the digital strategy can be called digital strategic planning. In 'Strategic Planning for Information Systems' a textbook for MICTM programme by Ward and Peppard (2002), Strategic Planning (for information systems) is a systematic, comprehensive analysis to develop a plan of (digital) action.

Of course, strategic planning is part of the exercise to come out with a strategy. Strategy is a generic term, where as strategic planning is a more detailed term which describes the processes of coming out with the strategy. Read more about strategy and strategic planning here.

From 'What is digital strategy?' by Mark McDonald, read below the article.

Digital (strategy) is the application of information and technology to raise human performance.

Human performance is the essence of digital transformation. Human performance creates the type of value that leads to revenue. Alternative goals for digital create efficiencies that largely drive down the cost of creating short-term benefits but drain the economy and growth.

Digital becomes just another technology when digital investments do not call for changing what people do in ways that enhance their ability to achieve their goals. If that is the case in your situation then the digital strategy option is simple – just spread the technology beyond its beachhead in marketing. Such peanut butter approaches fit that view of digital.

Digital technologies offer more than additional rounds of automation. Realizing what more looks like, however, involves reducing the idea of strategy to its essence. Strategy as a term has become too complex, loaded and limiting. Strategy needs to be simplified to its essential elements. Here is a suggestion:

Strategy is setting a direction, sequencing resources and making commitments.

While there is constant debate about what constitutes a strategy, direction, sequence, resources and commitment are all elements required to define transformation. Direction defines the “why” in terms of ambition and excluding alternatives. Sequence answers “when” and “what first.” Resources and commitment complete the discussion by answering “what” and “who.”


A business strategy for success in a digital world

Every technology with transformation potential starts in isolation, and digital is no exception. Mobile, cloud, process, customer, supply chain, etc. Each had its own siloed strategy before it blended into business strategy. As a result of these strategy waves the terms ‘digital’ and ‘strategy’ have become overused and misapplied terms.

Digital is no different. Digital strategy needs to become the essence of business strategy. Renewing the baseline for digital and strategy clears away the clutter, setting teams on a path for action. In that renewal a digitally informed business strategy becomes an answer to a simple question:

How can a business win using information and technology to raise human performance?

That is digital strategy, particularly after you have finished thinking of digital in the same light as IT, or as investments limited to marketing.

Ref:
https://en.wikipedia.org/wiki/Digital_strategy
Mark McDonald on "What is digital strategy?", available athttps://www.accenture.com/us-en/blogs/blogs-digital-what-is-digital-strategy

Ward, John & Peppard, Joe (2002) Strategic Planning for Information Systems. 3rd Ed. John Wiley & Sons. Page 69.

Strategy vs Strategic Planning

Q. (Also posted in My-eBikin)

What is the difference between strategy and strategic planning?

A.
Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms for guiding the implementation of the strategy. Strategic planning became prominent in corporations during the 1960s and remains an important aspect of strategic management. It is executed by strategic planners or strategists, who involve many parties and research sources in their analysis of the organization and its relationship to the environment in which it competes.[1]

Strategy has many definitions, but generally involves setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources). The senior leadership of an organization is generally tasked with determining strategy. Strategy can be planned (intended) or can be observed as a pattern of activity (emergent) as the organization adapts to its environment or competes.

Strategy includes processes of formulation and implementation; strategic planning helps coordinate both. However, strategic planning is analytical in nature (i.e., it involves "finding the dots"); strategy formation itself involves synthesis (i.e., "connecting the dots") via strategic thinking. As such, strategic planning occurs around the strategy formation activity.[1]

Ref:

https://en.wikipedia.org/wiki/Strategic_planning

P-O-L-C

Q.
What is P-O-L-C?

A. It is the acronym for Planning-Organising-Leading-Controlling.

Successful organizations depend on getting the right mix of individuals in the right positions at the right times.

Hence, a leader of this group need to ascertain activities are carried out by people best fit for the roles.

In the planning stage, the type of people who is best suited for the job would be those with futuristic and strategic ability. Then, there comes those who can organise and execute. When the business is on good progress, the ones who can lead and control so as to maintain performance and focus.

This is summarized below in the table:

(Extract: Principles of Management, page 29 & 58)

You can read more from the link here.

E - Emotion

M - Motivation

Ref:
Principles of Management, 2015, available for download online,
http://open.lib.umn.edu/principlesmanagement/chapter/1-5-planning-organizing-leading-and-controlling-2/

Key Selling Messages - your positioning

Q.
Key Selling Messages - KSM is a short sentence about how your product is position in the market. It tells your customer what your product is there for. Discuss.

A.
KSM - is a must for every sales call. We were told to repeat this KSM in every sales call.

BUT, why are we not making any sales difference? It does not seem to change the perception of our customers. Is there a problem?

The below article published in Corporate Visions has argument on this aspect of using product benefits in selling.

In a nutshell, it says selling your product benefit is not good enough! Why? It is about you, not about your customer. You need to show your customer his OWN benefit, and NOT what you think you product benefit were to him.

For example, your product - hand phone is equipped with good camera, the benefit is to capture moment of love.

BUT, the buyer is a blind man. His benefit of using the hand phone is listening to music. His OWN benefit is "happiness in music".

Hence, identifying what this OWN benefit is to a customer is the first step. No ASSUMING the benefit is similar across the spectrum of customers.

It therefore has a lot to do about segmentation of customers. Indeed, it is to tailor the sales pitch to individual segment, and best to individual person. Like a college kid would see the usefulness of 3-in-1 coffee different from a housewife, for example.

Below is verbatim of the article for further reading.

The Best Sales Techniques… And Some Of The Least Effective

Who couldn’t use an arsenal of effective selling techniques? But there is a lot of “conventional wisdom” out there that, in reality, doesn’t help you make the sale. Here are five of the best sales techniques that really work, as well as five classic go-to selling techniques that may, in fact, be hurting your sales efforts.

Selling Techniques that Work

1. Challenging the Status Quo

Most salespeople see the sales process as a linear process. At some point, it has an end – the prospect will choose either you or your competitor. The truth is that those are not the only two end points. There’s another option – no decision – which is chosen all too often. Studies show that 20 to 60 percent of deals in the pipeline are lost to “no decision” rather than to competitors. It’s only by challenging the status quo that you can get your prospects to see that change – i.e., adopting your solution – is necessary.

2. Finding Your Value Wedge

How much overlap is there between what you can provide to your prospects and what your competition can provide? Most B2B salespeople admit that overlap is 70 percent or higher. So rather than focusing on that “parity area,” you should focus on what you can do for the customer that is different from what the competition can do – this is your “value wedge.” Your value wedge must be unique to you, important to the customer, and defensible.

Learn more about how to define your value proposition.

3. Telling Stories with Contrast

Messaging is about telling your company’s story in a way that attracts prospects to your doors and turns them into customers. The challenge is that, if you’re like most companies, you tell your story in a way that doesn’t differentiate you much, if at all. But to create a powerful perception of value, you need to tell both the “before” story and the “after” story – you need to tell customer stories with contrast. When you tell customer stories, don’t be afraid to link data with emotion. Often the best way to do that is to talk about the people who were affected by the challenging environment they were working in. Then talk about how their lives became better, easier, more fun, or less stressful after using your solution.

4. Making the Customer the Hero

Every story has a hero. Who is the hero of your story? Is it your company and/or solution? If the answer is yes, then you need to rework your story – and make the customer the hero. The customer is the one who needs to save the day, not you. Your role is that of the mentor. You are there to help your customers see what has changed in their world and how they can adapt and better survive and thrive.
5. Using 3D Props

There are many ways to tell a story. But one extremely effective – and underutilized – technique is to use 3D props. Props break the pattern of what’s expected – and can make the prospect sit up and pay attention. Props make a metaphor or analogy tangible. Props create a physical reminder and can continue selling even when you’ve left the room.

Five Sales Techniques that Don’t Work

1. Selling Benefits

Everyone knows you need to sell benefits not features, right? Well, no. If you start your customer conversation with benefits, you’re jumping the gun when it comes to how most prospects are looking at their first interactions with you and your company. Remember that 20 to 60 percent of pipeline deals are lost to the status quo. That means that you need to establish a buying vision – the case for why the prospect needs to change – before your solution’s benefits will resonate. That means you need to effectively challenge the status quo and show how the prospect’s world can change for the better (see Selling Techniques that Work #1).

2. Competing in a Bake-Off

When you position yourself against your competitors, you’re competing in a vendor bake-off. It’s a “spec war” and you might gain the upper hand with one feature, but then the competition meets your feature and raises another. In the process, you and your competition are often having a very similar dialogue with the prospect, leading to the dreaded “no decision.” Instead of talking to the prospect about “why us,” focus instead on challenging the status quo by getting the prospect to think about “why change” and “why now,” and demonstrate the truly unique value of your solution (see Selling Techniques That Work #2).

3. Marketing to Personas

Many marketers use personas to develop messaging. And, on the face of it, it seems to make sense: defining the profile of your prospect will enable you to develop messages targeted to that profile. The problem is that personas are typically defined by who the prospect is – demographics and behaviors. But the need to change is not driven by a persona. The fact that a prospect shares similar characteristics with the persona isn’t what causes them to re-think their current approach and consider your solution as a new way to solve their problems. Instead of developing messages based on personas, focus on how to convince prospects that the status quo they are standing on is “unsafe,” then show them how life is better with your solution (see Selling Techniques that Work #3).

4. Relying on the Standard Elevator Pitch

According to Wikipedia, an elevator pitch is “a short summary used to quickly and simply define a product, service, or organization and its value proposition.” And just about every sales organization under the sun spends a lot of time trying to perfect that pitch. The problem is that the standard elevator pitch tells your story – not your prospect’s story. So instead of spending time refining your elevator pitch, focus on building the story that features your customer as the hero (see Selling Techniques That Work #4).

5. Delivering PowerPoint Presentations

The PowerPoint presentation has become the de facto go-to approach for sales meetings. Marketing churns out slides, then salespeople turn out the lights and rely on logo slides, bullet points, and animations to do the selling for them. The problem isn’t with PowerPoint itself but with how it’s used – and the right time and place for it. But when you’re in intimate, executive conversations, use sales techniques that are visual, and can really make a lasting impact. Instead of spending time refining your slide deck, focus on telling a compelling story and using props to pique your prospect’s interest (see Selling Techniques that Work #5).

Corporate Visions has developed a portfolio of solutions to help your sales organization develop, refine, and use the sales techniques that will be most effective for your business.

Ref:
Corporate Visions,
http://corporatevisions.com/selling-techniques/

5 steps in selling

Q.
What are the 5 most important steps in selling?

A.
You will need to make a few simple but radical changes in how you think and behave while selling.

You need a new understanding of how selling *really* works. And you need to master a few important new techniques that you probably are *not* using now...

1. Find the emotional pain or desire that's driving your prospect to buy
2. Bond and gain trust with *anyone* - FAST (whether you like 'em or not).
3. Qualify the winnable deals and kick out the losers before wasting your time.
4. Get commitments to get something in trade for every consultation, quote, proposal and demonstration that you do while selling.
5. Use the secret "hot chick" psychology to get every prospect to pursue you.

The bottom line is that you have to be able to close a high percentage of the deals you work on AND you have to spend your time working on only the best deals if you want to make the most money as a commissioned sales rep.

Don't tembak blank!

Ref:

http://www.industrialego.com/sales-training-courses/persuasive-selling.htm

IBS - Initial Benefit Statement a total solution?

Q. (Also published in My-eKerja!)
What is IBS - initial benefit statement? Give some examples of your own. Is it a total solution?

A.
Initial Benefit Statement: An explanation of what you are offering, what it means and why anyone should care - in the exact opposite order.

Why is it 'exact opposite order'?

Your product has some features and benefits. The usual logical manner in a feature and benefit analysis is the features give the product its benefits. For example, a new model of handphone which is equipped with the high resolution camera.

Product feature - high resolution camera.

Product benefit - high resolution image capture.

To further illustrate what it means for the benefits, emotions are being incorporated into the selling.

===============> ===========> ========> ======> =====>

Product benefit - high resolution image capture - good quality pictures - ability to freeze important moments in life.

The exact opposite order means:

====> =====> =======> ===========> ===================>

Freeze important moments in life - good quality pictures - high resolution images - product benefit

Hence, the IBS for this new product - A HAND PHONE would be, for example:

Salesperson: Sir, I have something amazing for you. 

Customer: Yes,...

Salesperson: There is this Hand Phone which could capture the best moments of your life! 

Total Solution to a Sales Approach?

The issue with this IBS is that it says about benefits - capture the best moments. However, if your customer is a blind man, is that a benefit?

This is the biggest question of a selling process. And, in fact, most people have forgotten this part.

The most important step in a selling process is to ask for a problem. If there is no problem, there is no need of a solution!

If the customer is a blind man, he has no problem with image. He cannot see anything. You put the best image in front of him, he cannot appreciate it!

So, before you go to your IBS, ask for a problem.

It sounds very risky to ask for a problem!? Right?

IF THE PROBLEM CANNOT BE SOLVED? How?

Well, that is a gamble, and a good approach is to identify if there is any gap in satisfying a customer.

The sales pitch below may illustrate the message.

Salesperson: Sir, could you think of a shortcoming of your hand phone?

Customer: Ya, I guess I would do better with its camera!

Salesperson: Could I take 5 minutes of your time to show you how you could capture the best moments of your life with our product XYZ?

Therefore, an IBS is used in such manner as to zoom down to the 'problem' of the customer. After all, selling is identifying the needs and fulfill that need!

Ref:
Shamus Brown. Why I Hate (Most) Sales Benefit Statements. Available at,

http://sales-tips.industrialego.com/sales-articles/090804.htm

Emailing a lunch appointment?

Q.
Do you make lunch appointment often that you would consider emailing it? Or use an App?

A.
In the busy schedule of today's life, meeting up a client over lunch is inevitable.

However, unless the lunch is for the enjoyment of the food and not business, you won't want to drive in the traffic to first reach the destination and next to wait for the food.

Hence, the idea of emailing a lunch appointment. The idea is you make an appointment with your client over lunch and the delivery will send the food to which ever the destination. The choice of food would be picked by both the client and you. Either you go pick it up yourself ie at nearby kiosk or you pick it up on the way to your client's place.

The Application would have an invitation to the client like in whatsapp. When the client register as yes! Then the food choices appears. By making selection on choices of the food, the bill goes to the person who initiate the appointment.

Then, the delivery mode is decided, either by own pick up or delivery (limited to a geographical area).

Payment can be made by cash or online e-banking.

What do you think of the idea?

Online e-commerce a perpetual phenomenon?

Q.
Is online e-commerce going to be perpetual?

（中国．北京13日电）阿里巴巴董事局主席马云指出，电子商务很快会被淘汰，这是个传统概念，明年阿里将不再提电子商务。

提出5个新方向

阿里由电子商务起家，对电子商务冲击传统商业一说，马云再次否认了这一说法。

在2016阿里云栖大会上，他说，电子商务没有冲击传统行业，电子商务的崛起是因为抓住了互联网技术，创造时适应时代发展的商业模式，传统商业的溃败是因为对未来的不拥抱。

马云还提出，未来30年是世界天翻地覆的30年，他提出了以下5个新的发展趋势：

第一个新：新零售

马云认为，未来10年、20年，新零售将取代电子商务这一概念，这是线上线下与现代物流结合在一起创造出来的新的零售业，这个模式将会对纯电商和纯线下带来冲击。

第二个新：新制造未来的制造业用的不是电，而是数据。

个性化、定制化将成为主流，IOT的变革将变为按需定制，人工智能是大趋势。

第三个新：新金融金融业过去是二八理论，未来是八二理论，如何支持80%的中小企业和年轻人将成为重点。互联网金融会使金融业变得更加透明，更加公平。基于数据的互联网金融才能做到真正的普惠金融。

第四个新：新技术

移动互联网之后，所有基于PC的技术都将被移动化，基于互联网和大数据的诞生创造了无数想象。

第五个新：新能源，就是数据数据是人类第一次创造了资源，与衣服不同，数据人家用过你再用会更值钱，是愈用愈值钱的东西。

Guru - Property Expert?

Q.
There are many who claim to be 'GURU' of property. Are they really who they are? Or who are actually 'Property Guru or Experts'?

A.
I always pondered over this question when I heard from people who are these 'Guru' in property investment.

If you do a search on 'who is a property guru?' you will end up with the website - propertyguru. So, is the operator of propertyguru.com a 'GURU'? Or, is it just an Internet property site?

And, the interesting part of these so called 'Experts' are young! Some have some celebrity flair in them! Gifted!

So, you may say age has nothing to do with success, that is true. You have young successful people in the IT industry. For example:

1. Facebook - Mark Elliot Zuckerberg (born May 14, 1984) - 32 years old
2. Twitter - Jack Dorsey (born November 19, 1976) - 40 years old
3. WhatsApp - Brian Acton (born February 24, 1972) - 44 years old & Jan Koum (born February 24, 1976) - 40 years old.

But property?

Ermmh... I am not too sure.

Lets determine what is success in property.

• Is it about having many properties?
• Is it about experience in selling and buying properties?
• Is it about familiar with various types of properties?
• Is it about building properties and selling properties?
• Or all of the above?

Really, I do not know what the definition of success in property means. If you Google 'what is success in property', you will end up with various sites which lead you to buy properties or offer tips or advice on buying or selling properties. Nothing about its definition.

Why?

Probably because it is like asking: 'what is the meaning of success?' It really means different thing to different people. To a scientist, success means winning a Nobel Prize. And, in such context, it is still may be, may be not a measurement of success - depending on his individual view to life.

So, it is a hard question to answer who is a real 'Guru' in property, or 'Property Expert'.

What do you think?

I think a Guru or Expert in Property should be:

1. A professional in the field of Property, be it buying or selling or owning properties.
2. A holding of some properties (with varieties) under his belt.
3. At least some years (best be 10 years) of being involved actively in properties.
4. For a period of at least few years (2 to 3 years) involved in some form of research in property.
5. Published or actively publishing writings on property, be it academic or layman readings.

Hence, he can be a

1. Conveyancing lawyer - like Mr Chris
2. Tax Consultant - like Mr Richard
3. Bank Mortgage Consultant - like Mr Miichael

These guys are professionally qualified, having involved in properties for years and published some numbers of academic and layman readings. The only thing I guess I am not so convinced is if they have done real research in property.

Then again, there are many so called researchers in the institution of higher learnings who hold PhDs, and published many academic findings on properties, theories in properties but never really sell or buy properties. Do you consider them as property Guru?

I don't think so.

And, do you take Registered Estate Agents (REA) or REN (Negotiators) as experts in properties?

This, I think is a tough question to answer.

The Law (VAEA Act 1981) specified that only REA and those who are registered as Valuers are licensed to transact properties in Malaysia. There are exceptions to this, that is owners, licensed auctioneers and holders of power of attorney (Section 22c(2) - go here to read 'exceptions on estate agency practice' are allowed to transact properties.

So, it may be true that an owner who is familiar with the transaction of properties can be a Guru fulfilling the first criteria - having been selling and buying properties.

And, if this owner is also an accountant (who deals with money), so he is a professional.

And, if this owner is also keen in research, therefore understands the details of property in a certain area - so he can be a Guru!

And, of course, nobody can stop him from writing up a book on his experience in property.

A person like that can be Dr Peter.

But, which is a bigger 'Guru'? Dr Peter or people like Mr Chris, Mr Miichael or Mr Richard (alphabetical order)?

Well, it really depends on how you want to qualify how many properties a person should own to be a Guru. Or how many years in biz or how many publications have the person produced. And, even that the quality can be different?

Probably to make it simple, people who are professionally qualified and fulfilling all the above criteria who owns as little as 2 properties, or 20 properties can be 'Guru'.

Does owning 2 properties make you a Guru? Or 20? Or 200? Well, obvious right?

Well, a developer would say he is the biggest 'Guru'. After all, he is the biggest seller and owner of property, he does research and he publishes his properties to sell!

He has Architects, Engineers etc under his belt! He also buys land and other asset types. He should be the biggest Guru of all!

Is he? I really don't know.

With that, I conclude my article.

Buyers pay or Sellers pay?

Q.
In a e-commerce platform, do you collect fee from buyer or seller?

A.
In conventional marketing, this is considered 'cost of running the business'. Hence, it is to be deducted from sales, a promotional cost that is charged to seller's accounts.

In modern day e-commerce, the buyer may be sourcing for the products online. This can form part of the fee of referral or commission payable to the e-commerce operator. So, in such case customers pay a commission for a good vendor recommended by the e-commerce operator.

Which is the better model? That is the argument of this article.

Before going further, t would like to use an abbreviation - USP. What is USP?

The unique selling proposition (USP) or unique selling point is a marketing concept first proposed as a theory to explain a pattern in successful advertising campaigns of the early 1940s. The USP states that such campaigns made unique propositions to customers that convinced them to switch brands. The term was developed by television advertising pioneer Rosser Reeves of Ted Bates & Company. Theodore Levitt, a professor at Harvard Business School, suggested that, "Differentiation is one of the most important strategic and tactical activities in which companies must constantly engage."[1] The term has been used to describe one's "personal brand" in the marketplace.[2] Today, the term is used in other fields or just casually to refer to any aspect of an object that differentiates it from similar objects.

Wikipedia - "USP"

And,

"For shoppers, the big advantages of the online option are lower prices, convenience and, sometimes, tie-in benefits such as cut-price shipping and delivery. As the Internet of Things (IoT) evolves, there will also be new opportunities for reordering groceries by barcode or letting a pre-programmed home appliance do it for you when supplies, such as fabric softener, are running low.

“There is a new sophistication among consumers,” Zhang says. “Even when in a bricks-and-mortar store, they use their mobiles to check prices, read product reviews, and get comments from friends.”

In some cases, after testing or trying on an item, they may then order it online, possibly getting a discount and home delivery into the bargain.

For retailers, the challenge is to effectively integrate online and offline platforms by taking an “omni-channel” approach, upgrading in-store service, and adopting features such as location-based technology.

“They have to think about how people are now using their smartphones. They can then improve the standard shopping experience with more use of QR codes, digital coupons and big data analytics,” Zhang says. “As for e-commerce, it is not just about the system. It requires an efficient logistics network, and that can be a very expensive proposition.”

An extract from "Strategising pays off as e-commerce revolution takes off", 10 March, 2016 South China Morning Post at, http://www.scmp.com/presented/business/topics/online-vs-offline-commerce/article/1922686/strategising-pays-e-commerce.

Sellers pay

The USP in marketing is more of like your positioning. It is how the service is going to be different from others. So, if it is different from others, does it differ in the emphasis of seller as advertiser or buyer as advertiser?

For simple understanding, whereby what prevails pays for the fee. If it is the formal, it would be the seller pays. And, if it is the latter, the buyer pays for the fee of using the e-commerce portal.

However, lots of e-commerce websites charge a fee to seller and yet it cannot overcome the continual consumer complains. The simple reason is that as the seller pays, it is better to lean towards the seller rather than the consumers. In simple terms, he who pays for my bills is my boss!

This is the culprit!

Buyers pay

So, if the e-commerce website charges a fee to the buyer, it would protect the buyer more. This is again due to the 'he who pays my bills' mentality. But, would the buyer pay for a fee? Especially on top of paying a merchandise which included a profit to the seller! Why should I pay when I am the customer?

For example, you go to a shopping mall, and you have selected a T-Shirt, the cashier charge you the T-Shirt price at the same time asks you to pay for cleaning of the shopping arcade, would you pay? Of course, NOT!

Hence, charging the buyer would be rather hard than charging the seller.

This is a mental block. To do that, it would have to establish a good USP that the buyer is unable to refuse to pay.

Based on the assumption that e-commerce is great for 3 reasons -

"the big advantages of the online option are lower prices, convenience and, sometimes, tie-in benefits such as cut-price shipping and delivery."

1. Lower price
2. Convenience
3. Tie-in benefits like shipping and delivery

There should be a 4th reason - Reliability

4. Reliability - where the buyer would be confident that the services of the recommended seller is guaranteed!

It could be done! When the buyers pay, it would ensure no bias towards or undue influence by the seller as buyers are the one who pay the bills! Whoever the bad vendors have to go! This will determine who is the reasonable vendor who can withstand the test of lots of buyers.

In fact, in agency practice, either an agent is contracted to source for a buyer - in case of working for the seller - or source for a seller - in case of working for the buyer. Insodoing, he receives a commission from the principal who can either be a seller or a buyer.

If the agent can deliver the best benefit for the buyer, for example to locate a good house and negotiate a fair price or price that is below market value, he is adding value to the buyer. Hence, he deserves to be rewarded for his effort!

I would aspire to start an e-commerce portal with this in mind. The emphasis should be on the buyer's side, not the sellers.

It should be able to select exemplary vendors who are tied to the reliability criteria. In so doing, a commission calculation would be tagged to the buyer, probably through his payment to vendor after the task has been completed.

Agent Positioning

Q.
As a new agent, what can I do to target my future business?

A.
Go here to read Agent Positioning 2.

This is somewhat a tough question with an answer that can never be 100% accurate.

The reason is simply because nobody knows 100% sure of the future. We do not know how the market will evolve in the future for a successful agency practice.

However, the 3 things that normally a writing of strategic position of this sort would entail are:

1. Understanding yourself;

2. Understanding your environment; and

3. Understanding your future.

So, the 1st part, understand yourself is Strength and Weaknesses as in SWOT analysis.

The 2nd part is environment. Social, cultural and Technological, as in PEST factor.

The 3rd part - future, I guess is something I invent myself.

The future part is one key topic in this article. Actually, it is much of the analysis on competitors and the potential pit falls in the biz. To simplify the matter, let us separate them into 3 groups.

1. Selling to Sellers - Developers
2. Selling to buyer Group - Investors (flippers)
3. Selling to third party - Potential buyers cum information seekers


Selling to Sellers - Developers

Most agencies embark on this biz segment in view of stock. Developers have stock, and most of them are currently over stocked. Hence, selling your agency services to them appears as a way out. Furthermore, as the margin of profit is getting less, maintaining a sales force by developer themselves is no more feasible. So, they are more than happy to appoint an agent who can take away that cost from their Income Statement!

However, Agent No.1 got a deal with Developer A. Agent No.2 got Developer B. Agency A and B becomes competitors. This is not so bad - as they are friendly competitors. It is healthy for the biz.

Then, here comes Agent No.3 who is very impressive. They got both Developers A & B. They place big booths all over. Well, you can say, why not!? They are impressive!

So, Agent  No.1 and Agent No. 2 pack their bags. Developer A and B say why?

What do you think?

Because Agent 1 & 2 want exclusive rights. Or else why should they carry your product? This is like marriage.

I'm married to you, why are you still having affairs? Don't you have some respect and loyalty to me?

Then Developers say: 'Well, I'm the boss! Don't tell me what to do, get lost!'

The moral of the story is:

1. Never trust your allies 100%! 

2. Never get married and expect 100% perfection from a marriage!

So, Agent No.1 sells for Developer A but quietly also sells for any other Developers - who does not want more commission?

Same with No.2 and no.3. At the end - it is a total mess out there!

Selling to buyers - Investors

The juice of selling to buyers are very much like investor club and making oneself a celebrity. You probably knew some of them around you.

These celebrities call themselves property experts, or Guru so to say. Some of them are technocrats and some of them are a bit more like movie stars.

This method usually ends up with over promising and under delivering because the crowd-following effect.

People who got the best deal filters down the deals to 'downlines'. Imagine you have got a crowd pulling effect - celebrity like. You have gotten some good deal with a project, you make your money first. This good deals are passed down to your downline, and they too make some money. As it passes down to those newbies, sorry the deals are no more 'hot deals'!

Hence, using people's money to make more money - as they say, is no doubt not sustainable in the long term. Why? Because eventually, you will fail to deliver! Then, your celebrity status becomes questionable. 

Probably you will get sued for certain bad decisions!


Selling to information seekers

This is the future! 

Currently not much money to make, so players are not many. Examples are The Edge Property, The Brickz, and some up and coming sites who writes articles and organize webinars.

To start doing this is to plan for long term. The biz model is more like Ho Chin Soon Research. It is about research and mapping, which is a commodity - product which Developers want.

But, the developers are doing their in-house research anyway. The public is not, however because they do not have the resources and expertise to do it.

Therefore, there is this gap. When a buyer looks for good advice to purchase, who can give them the advice?

And, I mean "Impartial advice"! Nobody! Why?

The Developer won't - because they are being bias to their own products.

The Agents won't - because there is element of selling their own stock or listings.

The Seller won't - because he wants the highest price for his property.

This gap needs to be fulfilled with a solid third party data, independent of the above three parties.

You probably need to appoint your own agent - not the agent selling for the seller side!

So, agencies that specialize on this type of market is rare, or limited to specialized job only. For example, industrial properties or land.

That is why the market for this sector is still in its infancy. You should concentrate on this market segment, find a niche and develop this position early!

Call me and let me know if you are interested!