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Developing and Marketing Products and Services for Commercial and Industrial Customers

Developing and Marketing Products and Services for Commercial and Industrial Customers. April 19, 2006 E Source Major Accounts Service Summit. Annotated and edited presentation to utility key account managers. Why Develop Products and Services?. Help Customers Enhance stakeholder return

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Developing and Marketing Products and Services for Commercial and Industrial Customers

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  1. Developing and Marketing Products and Services for Commercial and Industrial Customers April 19, 2006 E Source Major Accounts Service Summit Annotated and edited presentation to utility key account managers

  2. Why Develop Products and Services? • Help Customers • Enhance stakeholder return • Competition Justification is Easy – Execution is Hard!

  3. Competing Market Factors • Business Environment • Energy is small % of costs • Essential input • Fastest growing indirect cost • Utility Environment • Risk aversion • Stakeholder Return • Rate Cases and Regulated Returns • PUHCA Top-of-mind strategic issue but may still be a lower priority Risk and return go hand-in-hand Understand both environments - find the intersection

  4. Revenue Driven Solution Driven Product Environment Spectrum • Different Characteristics • Different Focus Areas • Different Risks and Considerations

  5. Revenue Driven • Characteristics • Product Management Orientation • Uniform product or service • One-to-many relationship • Focus • Efficiency • Cost control • Risks and Considerations • Can be effective in target rich environments • Prone to assumptions • Staffing “Here’s your answer. What’s your question?” “Track and Maintain” Lifecycle Management

  6. Solution Driven • Characteristics • Project Management Orientation • Custom solutions • One-to-one relationship • Focus • Flexibility • Measured growth • Customer relationship • Risks and Considerations • Blindness to market opportunity • Staffing “Market Myopia” “Build and Launch” Solution Developer

  7. Revenue Driven Solution Driven Product Environment Spectrum • Different Characteristics • Different Focus Areas • Different Risks and Considerations Different …but not mutually exclusive!

  8. Revenue Driven Solution Driven Evolving the Product • By evolving products from a customer, you – • Respond to a defined and articulated customer need first • Keep costs in line with revenues • Avoid (or at least reduce) the risk of market assumptions • Have more control over internal and external expectations The customer voice can lead you tosustainable products

  9. Strategic Solution Development Customer Describe the pain Define the “box” Account Manager Actively Listen Translate Initiate Marketing Constructively listen Collaborate Innovate Delivery Design Build Commission Quality Check Operational Check Validation Check Let customers drive product development

  10. Turning Solutions into Products • Validate the solution • Deconstruct the concept • Unique or shared pain? • Uniform or highly customized? • Business Case Conclusion Jumping is not a Sustainable Strategy

  11. Context for Listening Core Competencies Key Relationships Know your strengths Know your weaknesses Know your competencies Know your relationships Then listen Business Environment SWOT Constructive listening means stepping out of your business and into your customer’s

  12. Educating the Customer • Convey value in their terms • Speak to the audience • Decision Makers • Advisors • Operators Best sale? Customer buys without you needing to “sell”

  13. Lessons Learned • Reliance on others to make numbers • Reliance on partners for delivery • Key Account Managers • Understand how the customer buys • Manage Expectations • Add value • Under-promise and over-deliver • Captive customers not enough – need captive demand • Don’t abandon too early • Don’t retain for wrong reasons Don’t expect huge margins by being a markup on a markup What is the process? Who is involved? What are the criteria? More than a hand shake – requires mutual commitment Don’t underestimate the value of due diligence You’re not alone – use your product managers with customers

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