How Can I Increase Sales?

If the answer to that question were as simple as it sounds, I would be a billionaire several times over.  In fact, it is really about more questions than the answer.  When I talk with laboratory owners and managers all across the land, one question comes up more than any other.  “How can I increase sales, Or how can I get more new doctors?”  My most frequent answer is the one I learned to apply often as a facilitator.  It depends.  Just like when President George Bush Senior was asked about his preference for wearing boxers or briefs as commander in chief - he thought for a moment and answered, “Depends.”

I really can’t help with that question until I know at least a couple more things.  Until I ask my questions.  What business segment are you in? And, who is your target market?   Armed with this information we could begin to craft a marketing strategy to help with their original plea for more business.  One of the most important decision laboratory owners who are entrepreneurial businessmen and women have to make is, who do they want to be what for?  Let me explain.

In their 1997 book, The Discipline of Market Leaders, Michael Treacy and Fred Wiersema maintain that there are three different types of value disciplines that successful companies can adopt to command leadership in their markets. Which of these (if any) is taken by any particular firm depends upon the sort of product or service that they provide, and upon the organizational culture that they maintain.  It is the, if any, that I worry about.  Many of the laboratories I have worked with are too busy trying to be all things to all people.  They simply do not have the time to choose, or more importantly the perception that they have the power to do so.

 

Value Discipline
   

Basic Philosophy
   

Examples

Operational excellence
   

Low or lowest price and hassle-free service
   

Wal-Mart, McDonalds

Product leadership
   

Products that push performance boundaries
   

Intel, Nike, 3M

Customer intimacy
   

Delivering what specific customers want
   

Airborne Express, Nordstrom

 

Operational Excellence: An operationally excellent company offers the lowest price with hassle free service. They want the lowest total cost through some combination of dependability and price. Their products may not always be the top of the line, but their process will be painless for you.

Product Leadership: Product leaders offer the latest and greatest and most reliable products consistently. They probably don't have the lowest prices, but you can rely on them for the best.

Customer Intimacy: These companies provide a total package, total overall solution to customers in their products, service, etc. They may not be cheap, but instead focus on each customer specifically by cultivating relationships with individual customers.

Understanding these disciplines and choosing the one that is right for you based on your circumstances, temperament and objectives is key in defining who you are.  Then, it is easier to match that up to who is your target customer or market.  The book describes the philosophy and operation of these three value disciplines, and provides a detailed case study of a business that exemplifies the operation of each.

Chris Sager, the executive director at the Pankey Institute, was the opening keynote at the last NADL Vision 21 meeting in Las Vegas. He quoted Red Adair, the oil well fireman whose company did something spectacular than no one was in the business of doing.  Putting our oil derrick fires, usually with precisely timed multiple point explosions to rob the fire of the precious oxygen that it needed to burn its fuel source.  He said, “It can be done WELL, CHEAP or FAST - pick two!”  Red Adair used this simple axiom to illustrate that he could not be all things to all people.  It is so difficult, if not impossible, for us to do this in the dental laboratory business.  The value proposition you choose is the secret to your success.  It will limit your marketplace, but it will also help create operational congruencies and efficiencies that help your margins (no not the kind measured in microns).  You are free to choose your philosophy, mission and vision for your business.  Operational excellence, product leadership and a sense of customer intimacy are all valid business models that have proven successful over time.  The trick is to pick two! JDTUnbound

Do you have a question for Mark Murphy? E-mail jdt@nadl.org.