Chapter 12
Repositioning a Business

The Emotional Triggers That Rescued a Newly Integrated Company

The greatest problem in communication is the illusion that it has been accomplished.

—George Bernard Shaw

At times, there’s an advantage to being first and staking your claim. Just as often, there’s a benefit to letting another company do the heavy lifting, so you can evaluate the situation and zero in on untapped opportunities. This is such a story. A particular sector of the global offshore industry had been dominated by one supplier that operated as a virtual monopoly. Customers, eager to regain leverage over pricing and support services, encouraged an infusion of competition into the marketplace. In response to this demand, another international offshore conglomerate, known for their specialty niche businesses, prepared to compete with the fierce market leader by acquiring and merging smaller companies into one vertically integrated operation. Emotional-trigger research revealed how this company, though seemingly positioned to thrive, had inadvertently sabotaged their own success. Once they understood the emotional reasons that kept prospective customers away, they took corrective steps that quickly expanded their market share.

LESSON #9

Control your message before your competition does it for you.

The Absence of Choice

For decades, this segment of the offshore global market had only one major supplier capable of meeting their end-to-end needs. This supplier offered a highly respected product and was praised for their field-support team. But as the only game in town, the amount of influence they exerted over the marketplace rankled customers. And when product demand outstripped their capacity to fill orders, customers were forced to accept delays that put their own businesses at risk. The balance of power had shifted entirely to the supplier, and customers didn’t like it. As they frequently asserted, they controlled the purse strings so why shouldn’t they call the shots? In the absence of choice, they lost their leverage.

At Long Last

A second global offshore company, sensing customer demand for choice, prepared to capitalize on this unmet need. Initially hampered by fragmented relationships with many of their larger customers, they began by establishing a vertically integrated company capable of competing on the world stage. To satisfy the needs of customers who wanted single sourcing for a comprehensive range of products and services, they purchased two smaller companies to augment their existing product line. Merging the two new acquisitions with their own business enabled them to create end-to-end sales offerings that rivaled those of the industry leader. As they envisioned it, their new, vertically-integrated operation provided customers with a twofold benefit: one-stop shopping, and an alternative to the sole global competitor that dominated the marketplace.

Why Worry? Be Happy!

There are never any guarantees in business, but sometimes it’s possible to get pretty close. Or at least it appears that way. Everyone involved in this venture was confident it had all the earmarks of a sure thing. Each of the three smaller companies, which were now integrated into one end-to-end operation, had been highly regarded in their own right. Each was credited with manufacturing dependable, top-of-the-line products, and each had a reputation for innovation within their respective niche.

“Everyone involved in this venture was confident it had all the earmarks of a sure thing.”

So when this “sure thing” was met with a surprisingly lukewarm reception, management was ill-equipped to respond. They had invested in two major acquisitions and reorganized their entire organization to provide customers with the very choice they had repeatedly sought. Rather than enthusiastically rewarding them with new business, however, customers greeted the company’s expanded offering with widespread hesitancy and doubt.

This was a highly unusual and baffling case. When choice was finally introduced into the marketplace, it produced anxiety in the very customers who had wanted it for years. Taken aback by this unexpected response, management needed insights into the hidden reasons behind customer resistance. Emotional-trigger research was commissioned to uncover those reasons and use the insights as the basis for solving the problem.

Feelings, Nothing More Than Feelings

Customers often talk tough. Frequently, they will justify demands or rationalize actions by invoking logic. But as we’ve discussed throughout this book, logic is objective and impersonal. Logic fails to expose the emotions that really drive sales. What customers say and what they actually feel can be very different. When talk collides with feelings, feelings trump talk every time. It was a lesson the new, vertically integrated company learned the hard way.

Global offshore customers had come to rely on the market leader to meet their end-to-end needs. Such an arrangement simplified the ease of doing business. It streamlined paperwork, cut down on endless sourcing, guaranteed quality products, ensured a high level of service support, and lent a degree of predictability to the entire transaction.

Regardless of these advantages, emotional-trigger research revealed there was an aspect to this arrangement that made customers uneasy, if not defensive. While deep down they may actually have been comfortable with the relationship, they wanted to avoid the appearance of having ceded too much authority to a vendor. It had little to do with how they felt and everything to do with how they wanted to be perceived. So when customers met with smaller specialty companies, they voiced a desire for choice, complained of extended delivery times they had to endure, and bemoaned the lack of a healthy, competitive environment. On an intellectual level, what customers said made sense. More importantly, it satisfied a need to position themselves as objective authorities. Suppliers seeking to do more business with global offshore companies took them at their word. They genuinely believed customers wanted and would support a more competitive marketplace. Customers apparently believed the same thing, until they were confronted with the real possibility of change.

Prospective customers were suddenly unwilling to back up their words with concrete actions. Instead of embracing the new, vertically integrated company as a positive development, they were apprehensive. The theoretical had become real. Now the responsibility of making the wrong decision rested solely on their shoulders. The flip side of the reasons customers initially gave for wanting choice were now the very reasons that unnerved them.

As customers became more engaged in the conversations, it became obvious that their reasons for previously advocating increased competition came from their heads. When speaking with smaller suppliers, they framed the conversation in ways that were politically correct. Senior executives who controlled multi-million dollar contracts didn’t want to be seen as complicit in an overly cozy relationship with a major supplier, so they advocated the need for marketplace competition. They claimed to welcome the increased pricing elasticity and service concessions that such competition would inevitably bring. They said all the right things. They gave all the right objective, impersonal answers. But they never talked about what they felt. They never revealed the emotional trigger that was the potential undoing of the new company.

“While having options looked good on paper, there was little internal fortitude for the potential negative consequences of stirring the pot.”

It was true that customers disliked being dependent on a sole supplier, who at times was unable to satisfy all their product needs. On the other hand, the market leader was proving to be a fierce competitor they were afraid of alienating. The power had resided with this market leader for so long, customers no longer questioned the arrangement. Would upending the relationship, seizing control, and expanding the number of key vendors with whom they did business subject them to punitive measures? It seemed like a real possibility. The market leader embarked on a campaign to play on their fears. Although having options looked good on paper, there was little internal fortitude for the potential negative consequences of stirring the pot.

Be Careful What You Wish For

Once customers finally had a legitimate end-to-end supply alternative, they were left to wrestle with conflicting emotional triggers. Balancing the pros and cons of remaining with the market leader, versus giving business to a competing vendor, left them feeling trapped in a proverbial “damned if we do, damned if we don’t” scenario. They were unprepared for the rush of emotion that unexpectedly colored their deliberations. Up to the point when the marketplace dynamic actually shifted, customers sincerely believed that they wanted a viable choice. Now they weren’t so sure. To the new company’s chagrin, prospective customers didn’t seem pleased that their wish for increased competition had been granted.

An Emotional Impasse

Emotions regarding the new offshore company were mixed. Separately, each of the three acquisitions that now comprised the new organization had been acclaimed for superior technology and product innovation. But would the merger of these three independent companies be a boon for customers? They needed reassurance and specifics regarding how these assets would be leveraged for their benefit.

Prospective customers were anxious. How would additional competition impact them directly? Would the three niche companies, now part of the vertically integrated organization, coalesce into one seamless operation? Would they simply become another behemoth, subjecting them to all the bureaucratic problems that came with size? Could they trust this new supplier to honor delivery and service commitments? Would the company be distracted by internal merger and acquisition issues? They worried when the market leader insinuated that the new company would focus on containing costs rather than satisfying customer needs. Fearing the new organization’s internal priorities would take precedence over their needs, customers were particularly susceptible to efforts by their long-time supplier to exploit their fears of slow response times, sporadic service, and increased red tape. The market leader’s skillful attempts to manipulate and distort reality were working. Prospective customers were duly intimidated.

Provoked by the market leader, customers bought into the suggestion that the new organization’s strategy was to increase prices. They grew concerned that arrogance would overcome common sense and lead to price gouging. When customers were led to believe the real aim of the merger was expense control, not the introduction of an alternative end-to-end source of supply, they were easily convinced. When they were warned that each of the smaller companies had inadequate staffing levels to meet their regional needs, they panicked. So, rather than viewing the merger in a favorable light, the market leader had artfully exploited customer insecurities, potential liabilities, and unsubstantiated assertions to discourage client defections.

The truth was very different than the picture painted by their competition, but the newly integrated company had left prospective customers frustrated and uninformed. When asked for specific materials, none were available. The new, vertically integrated operation had put bodies on the street to introduce the new company, but failed to equip them with the tools they needed to communicate their story. The only materials they had contained a global message, rather than a localized one for each international location. It was the antithesis of what prospective customers valued and did not bode well for the future.

Emotional-trigger research revealed that prospective customers’ rational desire for competitive choice was overpowered by their emotional fear of the consequences. Their resistance to the new supplier was swayed by seeds of doubt, planted and nurtured by the market leader.

Letting the Competition Define You Is Never a Good Thing

The new company had allowed a dangerous communications vacuum to develop in the marketplace. They had been so preoccupied with the logistics of establishing their end-to-end sales offering, they failed to control their own message. They neglected to develop a comprehensive strategy for positioning their new company with prospective customers. Instead they assumed the benefits were obvious and that customers would automatically reward them for providing an end-to-end alternative. Well, the market leader had no intention of letting that happen!

“The new company had been defined by their competition. Now they were in the unenviable position of playing defense.”

With no comprehensive message coming from the new company, the market leader pounced to fill the void. They seized control of the “story” and told it to their advantage. The new company had been defined by their competition. Now they were in the unenviable position of playing defense. Misinformation had been widely disseminated and had to be countered. Unfortunately, the misinformation had accomplished its goal and fueled the fears of prospective customers. It was one thing to correct facts. It was quite another to quell emotional reactions.

Customers needed to hear directly from the company about how the new organization would positively affect their professional lives, and quickly, to blunt the damage caused by the market leader. Until that happened, customers would emotionally resist switching business from a long-time supplier to the new market entrant.

Control the Message

Management reassessed the local sales territories to determine if staffing coverage was adequate and to reaffirm that the existing staff had both the skills and training to do their jobs effectively. As necessary, staff was added, trained, or replaced to ensure customers received the caliber of service that had emerged as one of their core emotional triggers. In contrast to the impressions conveyed by the market leader, customers experienced a vendor who listened to their concerns and responded to their emotional need for strong, local service support. The result had a calming effect and gave the new company time to formulate their message.

Once immediate steps had been taken to reassure customers, the company’s top priority was to create very targeted and informative messages. A communications plan was developed to explain why this new entity had been created. Every aspect of the message was presented as a response to the emotional-trigger research. Whether it was how the new company would tangibly improve customers’ business lives, the value the company brought to the marketplace overall, or how they differed from the existing market leader, everything was positioned in the context of customers’ specific emotional needs.

Collateral sales materials, in combination with a trade advertising campaign, reinforced the message, established the brand promise, and armed sales people with a cohesive package explaining the company’s market positioning. But the communications plan went beyond just a message. It included a strategy for instilling confidence in prospective customers and forging relationships with them. Senior management held one-on-ones meetings with every customer group to personally answer their questions and solicit input on how to become their vendor of choice. The company president called key customers to discuss their issues and schedule time for personal visits. Every step along the way, customers were kept in the loop. Every new service initiative, product offering, or technology innovation was communicated through comprehensive sales materials, in-person meetings, timely phone updates, field trips, and the Internet.

From the beginning, the new company’s problems had more to do with perception than reality. Their products were high quality. Their support team was dedicated and service oriented. Their technology expertise was the best in the industry, and they were renowned for product design innovation. These advantages, combined with competitive pricing and unparalleled delivery turnaround times, made them an attractive end-to-end supplier for their industry segment. Repositioning their business against a formidable market leader elicited strong emotional reactions that almost proved their undoing, because they neglected to take ownership of their message. Once armed with the insights uncovered during emotional-trigger research, they found ways to dispel rumors, differentiate their company from the industry leader, and speak to the emotional concerns that won over large numbers of prospective new customers.

SUMMING UP
REPOSITIONING A BUSINESS

Situation

A company in the global offshore industry acquired two smaller companies in order to augment their existing product line and create an “end-to-end” sales opportunity. As they envisioned it, their new, vertically integrated operation offered customers a twofold benefit: one-stop shopping, and an alternative to the sole global competitor that dominated the marketplace. For years this formidable competitor had been the only game in town. Customers, eager to regain leverage over pricing and support services, encouraged the infusion of competitive alternatives. But when the new company, in response to specific demand, entered the market with quality products, strong field support, and an international reputation for innovation, customers stayed away. Emotional-trigger research was used to expose the reasons for customer resistance.

The Customers’ Emotional Triggers

Prospective customers were anxious. Provoked by the market leader, they bought into assertions that the new company had vertically integrated their business only to engage in price gouging and cost containment measures at the expense of field support services. They were frightened if they took business away from their long-term supplier, they’d be subjected to punitive consequences. They worried the new organization’s issues would take priority over their own needs. And, in the absence of any specifics, they were afraid to risk the known—no matter how imperfect—for the unknown.

Genuine Insight

The company had allowed a dangerous communications vacuum to develop in the marketplace. They had been so preoccupied with logistics, they had failed to take control of their message. Instead, their major competitor jumped in to fill the void and negatively framed their story.

Solution

First management reassessed local sales territories to ensure adequate staffing levels and reaffirm the technical expertise of those individuals. As necessary, they trained, added, or replaced members of the support teams. Once accomplished, it had a calming effect on prospective customers. Then the company’s top priority turned to creating very targeted and informative messages explaining why the new entity was developed and how customers would benefit. Every aspect of the message from collateral materials, to trade advertising to senior management meetings with customer groups, to personal calls from or meetings with the company president was positioned as a specific response to customers’ emotional needs, revealed through the emotional-trigger research. Once armed with the reasons customers had stayed away, the new market entrant responded quickly. They found ways to dispel rumors, differentiate their company from the industry leader, and successfully increase their market share.