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How to prepare mafia offers under lithuanian circumstances (red)


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How to prepare mafia offers under lithuanian circumstances (red)

  1. 1. How to prepare Mafia Offers under Lithuanian Circumstances Nerius Jasinavičius TOC sprendimai
  2. 2. In a strong wind even turkeys can fly Old proverb
  3. 3. Let’s do some reality check Two questions ? • Do you have some free capacity ? • Is your market share less than 20% ?
  4. 4. Reality check Conclusions • You have an opportunity for growth • Your constraint is SALES
  5. 5. Let’s go and sell !!!
  6. 6. Houston, we have a problem!
  7. 7. Myth #1 We (Lithuanian SMBs, UAB “Kažkokia“, ...) are different !
  8. 8. Unique situation and problems • • • • • • Very strong competition We are squeezed on prices Where to find good sales people ? Clients want discounts and discounts Hard to balance cash-flow Owner working 24/7
  9. 9. Myth #1 Are we really different ? Is it bad thing to be different ?
  10. 10.
  11. 11. Myth #2 If you have really good product/service customer will find you
  12. 12. It is not enough to be good • Some clients do not know you exist • Some clients do not know they have a problem (which you can solve) • Some clients do not know you are better than others • Some clients do not see/understand the value of your offer
  13. 13. Myth #3 Marketing is about branding (and we cannot afford it)
  14. 14. Challenge • When the details of an offer are not clearly laid out, it is easy to turn even the best sales offer into a mess. • When the details of the offer are not constructed to mitigate risks and ensuring benefits (to both clients and the Company) the outcome may be losing many good sales opportunities and/or losing profit margins.
  15. 15. Challenge • Pursuing wrong prospects is not just a waste of valuable resources (money capacity time ) but it can lead to the “conclusion” that the direction (or the offer) is invalid.
  16. 16. Before we go and sell marketing has to make sure • We know our target market (to whom we will sell) • We have detailed offer to target market
  17. 17. Myth #4 Selling is an art and only artists can do it
  18. 18. Marketing and Sales How to convince a specific prospect? Sales (Converting the market into money) 1. Directly dealing with prospects/customers 2. Closing a deals Marketing (Creating markets) 1. Building a valuable offer (identifying markets, constructing the offer features) 2. Building the awareness to the offer (marketing channels, advertising)
  19. 19. Characteristics of a major sale F Long sales cycle (Numerous meetings, over a relatively long period of time). Major sales require true salespeople, consult with others, prior to making the F The prospect mustan emotionalwhobecomessales orders. decision not just clerks level take a liability). (Convincing only on debates about the F The significantthe meetings, whenpurchasing considerations occur between the salesperson is not present. F Most major sales entail a continuous relationship with the prospect. the salesperson and the customer must meet several times after the sale is made. Therefore, it is not easy to separate between the salesperson and the product. if F A major sale means a major decision –thatthe decision is wrong, this also means a major mistake – one cannot be easily ignored or hidden. -2-
  20. 20. Model for major sales persuasion: Overcoming Resistance to Change Rational persuasion Overcoming rational resistance to Change Peeling the layers of resistance Irrational “persuasion” Overcoming emotional/psychological resistance to Change Overcoming Psychological barriers
  21. 21. Rational persuasion: Overcoming rational resistance to Change • There are different kinds of layers. Not all of them exist, but if they do they must be peeled off in a logical sequence. • Trying to peel off an internal layer without first peeling an external one will only intensify the resistance. 5 76 4 3 2 1
  22. 22. Layer #1: There is no problem! WHAT TO CHANGE? Layer #2: The problem is different! Layer #3: The problem is out of my control! WHAT TO CHANGE TO? Layer #4: I have a different direction for a solution! Layer #5: The solution does not address the whole problem! Layer #6: Yes, BUT the solution has negative outcomes… HOW TO CAUSE THE CHANGE? Layer #7: Yes, BUT there are obstacles to implement the solution
  23. 23. Lithuanian examples of "Mafia-offers"
  24. 24. Non-Lithuanian example
  25. 25. 1st example
  26. 26. Who we are? • Producer of labels and packaging • Modern and reliable partner • 257 employees • Anual sales 20 mln. EUR • More than 1500 customers in Lithuania and abroad • 2600 orders a months in average.
  27. 27. Why inventory management? • Shortage in the warehose – lost sales • Surplus in the warehouse – elimination off illiquid, frozen cash • Costs of purchase management • Human factor: – “I think that…” – „Needed it yesterday!!“
  28. 28. What kind of inventory management? • Principal attitude: inventory should be managed by technology • Technology should serve people: – clear, simple, user friendly – specialized by functions
  29. 29. The solution: StockM DBM What’s next? • Fear and lack of confidence • 9 months pilot: – Does it work? – How does it work? – What results? • Introduction of service for the customers
  30. 30. Why for the customers? • Packaging is cheap... Packaging is cheap?? • Big order = small price: – Surplus in the warehouseelimination of illiquid – Loss of flexibility – Bad cash flow • Small orders = shortage: – “Fires”- lost sales – Increased costs of purchase management • Unreliability of forecasts
  31. 31. Increase impossible decrease
  32. 32. Customer inventory management based on StockM DBM (Dynamic Buffer Management) principle
  33. 33. Reaction • “Oh, no no...” • “Sounds interesting but it won’t work in our case” • “I have doubts but let’s try” • Preparation • Pilot project • Discussion of results and development
  34. 34. Case study: expectations and results Sales – Average inventory – Lost sales – Surplus - Turnarounds
  35. 35. Case study: expectations and results • Lower storage costs – amount of labels decreased by 48% • Better cash flow – inventory decreased by 37% • Low/stable purchase management costs – 46 orders without/minimum involvement of customer • Required items at the right time - 0 shortages or fires during the term • Better planning of packaging expenses – fixed price
  36. 36. Smart warehouse: what did we want to achieve? – Manage and optimize inventory flow at the customer’s warehouse with no load to customers accounting system and no changes in it. – Optimize our production process, improve production planning and inventory control. – Do not load customer with aditional work, share data from our accounting system about supplied items.
  37. 37. 2nd example
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  39. 39.
  40. 40. Are you ready ? “Frame of Mind” Ambitious and possibly “frustrated” by missing opportunity Complacent “Life is Good” – ready to listen, not willing to move Crisis if this does not work - “it’s possibly our end”
  41. 41. Questions More info at:
  42. 42. Nerius Jasinavičius • 7 years management experience in IT, finance, production sectors • 9 years management experience in business consulting • Certified LEAN and TOC • Certified management consultant