One of the most fascinating things about business is the belief that keeping everything a secret will keep the competition at bay while, at the same time, provide some strategic advantage.
Let me give you two examples of this thinking. While developing an Internet strategy and execution plan with a client who manufactures wall coverings, I discovered that for every design the company brought to market, it would develop 10 along the way. The practical reason only one design would be brought to market is the $100,000 cost associated with manufacturing samples for representatives and designers.
I pointed out that it costs relatively nothing to put all the designs on the company's Web site, which would give designers more options. Since the commercial use of wall coverings is seldom a short production run, a Web-only design would be profitable to produce. To protect the designs online, each would be watermarked. If the designs were lifted from the Web site they would hold the name of the manufacturer should they appear on a competitor's Web site.
The answer to my suggestion was a categorical “no.” Because of their market leadership, many competitors copy the company's designs to save design fees. If all of the designs were put online, even using a password-protected Extranet, the competition eventually would steal the designs and go into production. Secret designs don't do the company any good. The competition doesn't know about them nor do the designers who specify the designs.
Service area example: I recently had the opportunity to work with a consulting firm. Aside from a yearbook (pictures and biographies of the consultants) and client list, the consultants were stalled as to what to put on their Web site. I suggested they put as much information as is necessary to accomplish the initial interview with a prospective client. The interview includes learning about the client and then presenting the consulting firm's credentials and methods.
No way! If the firm's methods were published on the Internet, everyone would steal the methods and become competitors. Or worse, clients would use the methods and become their own consultants.
Here's the fascination. If senior management from these example companies or any company considers the value of setting the pace, being the leader and providing the solutions, their business will flourish. Competition will die. The market will be attracted to them.
If the wall-covering company offers 50 new designs a year instead of 10, buyers would always look to the company's online design offerings before considering others. More variety and options say the market leader is more creative. And creative design support keeps the designer employed.
All competitors have costs associated with bringing new designs to market, even when there are no design costs. With 50 designs to knock off instead of 10, the competitors will consume a great deal of time, energy and cash to stay in the game. Their lines will proliferate and aid to their own demise. The company who offers designs online can build to order since the designs they carry are electronic and the process moves from the PC to the production equipment. The competitors are not electronic in the design area, so each design they copy must move to a production mode for samples
to be produced for sales people. This increases overhead through increased costs of samples and production.
The leader trains the designers to use their online design support system and reduce or eliminate the $100,000 design to market cost. Not discussed is the ability of representatives to increase sales per person because all prospects and customers have all the information, which virtually eliminates the need for the representative to supply the old-fashioned sample book. A few computer printed samples suitable for the designer presentation can be sent by overnight delivery when a design is selected.
The consulting firm that puts its methodology online reduces the time necessary to qualify an inquiry. For consultants, increasing the quality of fewer inquiries is a gift. If it is presumed that an inquirer's company can afford the consulting fees, the consultant is on the airplane to establish contact, build a relationship and secure the client. Only after an initial meeting does the prospect understand if the consulting methods are in line with the company's needs. Let the Internet do the qualification — not only of the inquiring prospect, but, more importantly, let the prospect qualify working with the consultants. This keeps the consultant off the airplane if a prospect doesn't accept the firm's methodology. No time is wasted on a first meeting.
Fear of intellectual property theft is silly. For anyone to steal another firm's methods and approaches is like wearing someone else's shoes. A business that tries to use another's methods and approaches won't prosper. Clients know when consultants are performing to someone else's tune. As a consultant, I learned through time that other people's approaches aren't mine. Besides, in the rapidly changing times of today, consultants are constantly rewriting their methods and approaches.
I also was subject to jumping on an airplane to capture a big opportunity. No more. I give it all away, online, www.tracyemerick.com. Anyone can find complete do-it-yourself business direct marketing guidelines and a self-scoring evaluation of the strategic and tactical application of direct/database marketing in their company, my Internet philosophies and approaches, and many other tidbits. The only online inquiries I get are from people who have qualified me.
Why does giving away everything you do qualify online inquiries? Acknowledgment of capabilities, manufactured goods or consulting services. In your business dealings, you want to work with people and companies that can fulfill your needs today and again tomorrow. While anyone can make wall coverings if they really want to or apply a consultant's methods to solve their own problems given enough time, using a capable, competent provider fulfills the needs for covered walls and organization change much faster. Everyone can do everything, but we don't. We look to those who can get us where we need to go at a price less than it would cost us to get there. This, by the way, is management.
In these times of rapid dislocation caused by the Internet (the topic of the next column), what you produce today will be changed by this time next year anyway. The only medium where you have the cost efficiency, communication effectiveness and constant content flexibility to give it all away is the Internet.
Giving it all away today creates customers and clients for tomorrow.
Tracy Emerick is principal of Taurus Direct Marketing, Hampton, NH, a direct marketing agency and consultancy, and president of Receptive Marketing Inc., which provides Internet site development.
