Sales & Marketing Revitalizing the Value Proposition, Keith O'Brien, Frost & Sullivan, Jim Kizielewicz, Kronos

Sales & Marketing: Revitalizing the Value Proposition

Keith O’BRienVice President, Global Research, Growth Team Membership™Frost & Sullivan

[email protected]

JiM KizielewiczSenior Vice President and Chief Marketing OfficerKronos incorporated

[email protected]

Marketing and Sales Alignment conferenceSeptember 20–21, 2011

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The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Growth Team Membership™ research.

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Firm: Kronos

industry: Software Services and Applications

headquarters: chelmsford, Massachusetts, United States

Geographic Footprint: Global

Ownership: Private

Revenue (2010): ~$750 million USD

Profiled Best Practice Company

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Growth Challenge

Problem:

Slowing product growth forces Kronos’ marketing and sales organizations to create and deliver a differentiated value proposition.

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Kronos’ marketing leadership works with Sales to revitalize the value proposition and create differentiated sales messages

creating and embedding a new Value Proposition

ActivitiesPerform market assessment•conduct brand positioning •workshopRun customer/prospect •focus groups

Activitiesconduct Affinity •Diagramming exercise to identify customers’ critical Business issues (cBis) Pinpoint how Kronos •uniquely addresses these cBis and translate into a value proposition

Activitiesconduct Power Messaging® •workshop with sales and marketing leadership to update messaging and techniques

Activitiesconduct Power Messaging® •workshops with entire sales forceestablish Sales and •Marketing leadership councils by vertical market

Objective conduct a baseline assessment of the current value proposition’s strengths and weaknesses

Objective Develop differentiated value proposition

Objective translate the value proposition into sales force messaging

Objective Achieve 100% adoption of new messaging by sales force

Output Market assessment•Focus group findings•Governing Brand idea (GBi)•

Output critical Business •issues (cBis) and key differentiatorsnew value proposition •Foundational Message Guide •(FMG)

Output new messaging techniques•Portfolio of customizable •messages

Output Sales force adoption of •customizable messages and techniques industry-specific Sales •and Marketing leadership councils to drive ongoing adoption

Revisit Existing Value Proposition

Create New Value Proposition

Develop Sales Messages

Drive Sales Force Adoption

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Pressure-test market understanding and value proposition

Market Assessment Brand Positioning workshop

Situation

Management believed Kronos was the •market leader, but the company’s product revenue growth was flat, despite category growth

commissioned a third-party assessment of •the workforce management (wFM) market

Objective

capture the current state of the workforce management category.

Findings

t 3 wo customer segments exist: ease-of-use buyers who value straightforward -implementation with low cost of ownership (50%) Functionality users who value advanced -features (50%)

Kronos is the market leader, but growing slower �than the market

Kronos lacks a compelling category positioning �

ParticipantsSenior sales and marketing executives (one-day workshop)

ObjectivesAudit existing marketing messages and •collateral

Develop preliminary Governing Brand ideas •(GBis) to be tested in focus groups

“The experience to know it’s complex. The expertise to simplify it.”

“Workforce management doesn’t have to be so hard.”

“Simple solutions that work hard.”

Preliminary Governing Brand ideas (GBi)

need to revise brand positioning to appeal to both segments

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Conduct focus groups to gather insights on the most effective brand positioning

Focus Groups

Objective: Validate Market Assessment findings

Sample Questionswhat are your top-three needs •addressed by a wFM solution?

On a scale of 1 to 5, how •important is fast payback to you?

ResultsUsers are frustrated with the •complexity of wFM solutions

Prospects who value ease-of-use •wFM solutions are currently underserved

Objective: identify the most convincing GBis

Sample Questionswhich positioning statement do •you find most compelling?

would the statement entice you to •consider Kronos?

Results“Workforce management doesn’t •have to be so hard” is an appealing brand position:

the statement defines the category -and appeals equally to functionality and ease-of-use buyers

Objective: Assess Kronos’ competitive standing

Sample Questionswhat is Kronos’ personality? •

For what type of solution would •you call ADP?

ResultsAwareness and consideration rates •are lower than expected

existing value proposition around •time and attendance benefits is undifferentiated

Perception of market strengths •does not align with customer/prospect perceptions

Action StepsSimplify the customer experience by •modifying the user interface

expand brand positioning to •accommodate ease of use and high-functionality customer segments

Action StepsDevelop a differentiated value •proposition

work with sales leadership to •embed new value proposition with the sales force

Action Stepsleverage the brand positioning in •marketing

create internal documents and •perform training to align employees on the new positioning

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Develop a customer-focused, differentiated value proposition

Developing the Value Proposition

VP, corporate Marketing

cMO VP, enterprise Marketing

Control labor costs

Minimize compliance

risk

Improve workforce

productivity

Create Affinity Diagram Identify Critical Business Issues (CBIs)

cBis are core customer needs that can be addressed by workforce management solutions.

Develop Kronos’ Key Differentiators

Kronos provides 33 complete automation

Kronos delivers high-33 quality information

Kronos is easy to own 33

Marketing leaders identify how Kronos can uniquely address critical Business issues.

Using the Governing Brand idea as the foundation, Marketing leaders employ the Affinity Diagram to identify three critical customer needs that should be addressed by a workforce management (wFM) solution.

Workforce management doesn't have to be so hard!

Articulate Value Proposition

Kronos is the global leader in workforce management solutions that enable organizations to:

control labor costs•

Minimize compliance •risk

improve workforce •productivity

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Create a Foundational Messaging Guide to provide a companywide reference point for the new value proposition

Foundational Messaging Guide (FMG)

Foundational Messaging Guide

contentswhy workforce Management? . . . 3 cBi #1 controlling labor costs . . 4 cBi #2 Minimizing compliance

Risk . . . . . . . . . . . . . . . 7 cBi #3 improving workforce

Productivity . . . . . . . . . . 9 Differentiator #1: complete Automation . . . . . . . 14Differentiator #2: high-Quality information . . . . . 17 Differentiator #3: easy to Own . . . . . . . . . . . . . 18

The FMG: An Overviewthe FMG is designed to align all employees on Kronos’ value •proposition and is updated regularly

the FMG demonstrates how Kronos addresses the two core •questions listed below

FMG Objectives FMG’s ability to attain objective

create common understanding of the value proposition Drive alignment on role of wFM, core customer needs, and Kronos’ solutions Supply the building blocks for differentiated sales messages Provide sales messages to address critical business issues �Develop selling techniques to be used with prospects �

why do customers purchase workforce management?

Answer: the three critical Business issues (cBis)

why purchase a Kronos workforce management solution?

Answer: Kronos’ key differentiators around each cBi

the FMG captures the value proposition in a written format; however, it does not enable Sales to articulate the value

proposition verbally.

In Summary

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Translate the value proposition into effective sales messaging

Sales Force Adoption challenges

Power Messaging® workshop

Sales Messaging techniques

Bringing differentiators to life through customer messages

the sales force needs to believe in the messages

“not invented here” syndrome

Workshop ParticipantsMarketing leadership, Sales leadership, Key sales representatives, and Product Management

Purposetranslate differentiators into messages and delivery •techniques for SalesBuild sales and marketing consensus on messages and •techniques

Critical Inputswhy customers buy (cBis) and why they buy from Kronos •(differentiators)Preliminary success stories that demonstrate how Kronos •uniquely meets customer needs

Messaging Techniques

Message Attributes

Number Plays

Stories with

Contrast

Big Picture

3D Props

leverages customer storiesAppeals to multiple learning styles (visual, auditory, kinesthetic)customers can relate to the messageimpact is easily understood and memorable

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Squeezing More Out of Scheduling

Jamba Juice

Key Products

timekeeping, •forecasting, scheduling

Develop easy-to-customize messaging techniques

how to create a Story with contrastRetail & Hospitality Customer Example

Before Kronos

Manual forecasting and scheduling •resulting in:

Gaps in coverage -Overstaffing -

inability to react to changing •conditions, especially the weather

no visibility into store operations•

Results Achieved

“The $19.7M decrease in labor cost was primarily attributed to optimization of labor scheduling, leading to more efficient labor management.”

– 2010 Annual Report

2008 labor = 36% of sales•

2009 labor = 34% of sales•

After Kronos

Automated scheduling•

Accurate baseline forecasts•

Quick reaction to weather conditions:•Overcast and cold—call people off -Sunny and hot—staff up -

companywide scheduling and •regulatory compliance

BusinessQuick-serve •restaurantSmoothies•

company Size

730 locations•Operates in 47 •states

the story must be relevant

emphasize the benefits of choosing Kronos

highlight pertinent results

it’s a story, so limit data

Make the customer the hero

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Adoption Barrier:Skepticism

Adoption Barrier:Ownership

Drive sales force adoption by directly addressing barriers to adoption

Power Messaging® workshop with Kronos Sales Force

Workshop Overview

Attendees: Sales force (450 participants, in groups of 25–30)

Duration: two Days

Pre-work:

complete •Power Messaging® elearning module

Bring •examples of customer challenges successfully addressed by Kronos’ differentiators

Secure Buy-In on the CBIs and Differentiators

Overcoming the Barrier:the facilitator leads a group exercise requiring participants to “wrestle” with the new messaging:

Discuss the cBis and •differentiators candidly and compare them to existing messages

Prove that the differentiators •are unique compared to competitors’ offerings

emphasize positive •engagement with the differentiators

Create Ownership of the Techniques

Overcoming the Barrier:the facilitator helps participants tailor their own success stories for the new messaging techniques by:

encouraging participants •to use multiple messaging techniques and select the ones they prefer

Put the Techniques into Practice

Overcoming the Barrier:the facilitator leads role-play sessions to practice message delivery and drive behavior change:

Participants present their •stories using the new techniques and receive peer and facilitator advice

Participants build their •confidence in the messages and techniques

Adoption Barrier:Confidence

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Establish Sales and Marketing Leadership Councils to drive ongoing application of the value proposition

Sales and Marketing leadership council

charter

Sales and Marketing leadership council

PurposeRun operations •reviews of each vertical market

Build and •maintain trust and transparency

ResponsibilitiesMonitor the state •of the business

examine sales •and marketing effectiveness

Meeting ScheduleMonthly for four hours

Marketing

Attendees:Director of Marketing; VP, enterprise Marketing

Value Proposition Support:

Develop Stories with •contrast for Sales

Provide presentation •templates

Sales

Attendees:Area VP, Sales; Director of Sales Management


conduct follow-on •training

Provide customer •success stories to marketing

Product

Attendees:Director of Product Management


Align the product •roadmap

ensure development •plans address customer issues

Services

Attendees:Director of Services


train services staff •

ensure the customer •experience reflects the promised value

Example:Spot-check sales presentations for consistency with brand messaging

Example:Video mock sales presentations using new messaging techniques and provide feedback

Example:Use customer review panels to confirm innovations reflect the voice of the customer

Example:certify services staff so they communicate the same value proposition to customers

Retail & hospitalityManufacturing Public Sectorhealthcare Service &

Distribution

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Business Results

Percentage of Sales Force Using Power Messaging® techniques

(Survey of Kronos Sales Force)

impact of Power Messaging® techniques on closing Business

(Survey of Kronos Sales Force)

Annual Revenue and eBitA*

* EBITA is earnings before interest, taxation, and amortization.

Very Consistently

Consistently

Somewhat Consistently

71%

21%

8%

Somewhat Consistently

Very Consistently

Consistently

Very Consistently

Consistently

Somewhat Consistently4%

80%

16%

Some Impact

High Impact

Significant Impact

$600$620$640$660$680$700$720$740$760$780$800$820

$0

$50

$100

$150

$200

$250

FY 2008 FY 2009 FY 2010 FY 2011 projected

Revenue($ Millions)

eBitA($ Millions)

Revenue

eBitA

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Register for a webinar with Charles DeWitt (Kronos Inc.) and Tim Riesterer (Corporate Visions)

Ask the Thought Leader Webinar

Sales & Marketing: Revitalizing the Value Proposition

tuesday, 27 September 201111:00 et(Duration: One hour)

ReGiSteR for Free at http://www.frost.com/Atl

the webcast will feature:A best practice case study that shows how Kronos’ Marketing and Sales developed and •delivered effectively a differentiated value propositionKey lessons learned and Q&A with charles Dewitt, VP—enterprise Marketing and tim •Riesterer, cMO

charles Dewitt tim Riesterer

http://www.frost.com/ATL