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“Reputation’s worth more than the last hundred million dollars” – Rupert Murdoch

Dec 31 • Management and Leadership, Morry Morgan Articles, Sales and Negotiations, Trainer Articles • 15729 Views • 1 Comment on “Reputation’s worth more than the last hundred million dollars” – Rupert Murdoch

“Reputation’s worth more than the last hundred million dollars”

A COMPANY’S REPUTATION IS ITS BRAND. Brands are built via marketing and word of mouth and for Rupert Murdoch a reputation is worth more “than the last hundred million dollars”. He should know. Scandals have damaged both his personal reputation and the share price of News Corp.

However, while marketing activities are important in building this reputation the message is obviously biased. It is your business that is spending money to promote your product or service over that of your competitors. This isn’t to say that a big marketing budget is a bad thing. Companies with big pockets definitely have an easier time launching new products or services, but maintaining that reputation takes more than money. For long term success reputation must be built via word of mouth, from Key Opinion Leaders (KOL) and Key Internal Influences (KII).

Key Opinion Leader (KOL)

KOLs can be a single person or an entire organisation. In the multi-billion dollar pharmaceutical industry, KOLs are used to describe the senior doctors who help drug companies sell drugs by publicly promoting their choice in medicines to their peers.

KOLs can be a single person or an entire organisation.

This influence could be as passive as over-lunch conversations with fellow doctors, or as obvious as conducting formal presentations on behalf of the pharmaceutical company. I know this, because as a ‘drug rep’ for Hoechst Marion Roussel, which underwent further mergers into Sanofi-Aventis, I often asked KOLs to speak on behalf of my company at various company sponsored events. While the media occasionally reports that KOLs are often ‘bought’ via cash incentives or holiday packages, I can honestly say that the only kickback I gave my KOLs was a nice bottle of Australian wine. KOLs are simply the ‘cool kids’ at school who initiate the cyclic yo-yo craze.

KOLs can also be entire organisations. If HP, Microsoft, or Coca-Cola began buying your service or product this decision could influence other inspiring companies to follow suit.

If HP, Microsoft, or Coca-Cola began buying your service or product this decision could influence other inspiring companies to follow suit.

For this reason, Fortune 500, or Global 100 companies are sought after as their signature on a contract can trigger a cascade of new customers. Many fashion magazines, particularly those that are new, display luxury brand advertisements for free to encourage other, lesser known brands, to copy with paid advertisements. For this reason a smart negotiator can drop a supplier’s prices based on the knowledge that the supplier’s Need is to gain a KOL to help them build a reputation with their other potential clients. When my business secured Morgan Stanley as a customer in 2008, their competitor Merrill Lynch suddenly showed interest in using our services. Morgan Stanley had done their due diligence, paid money for our service and, more importantly, became repeat business. The level of risk for Merrill Lynch was considerably lower, and that made working with us considerably more attractive. Furthermore, experience with Morgan Stanley ensured that that our business understood the financial banking sector, again, reducing the risk of using our service. If only Merrill Lynch hadn’t collapsed during the Global Financial Crisis, I would have secured that sale!

Many companies also use corporate KOLs in their marketing. Back in 2004, when I was in Japan, I saw an advertisement for SAP in the Tokyo subway. “Tumi Runs SAP,” read the billboard. This advertisement caught my attention for two reasons. Firstly, Tumi is a large, respected American company that manufactures suitcases and bags for travel and whose purchase of SAP services will obviously influence smaller companies attempting to replicate Tumi’s success. The second was the advertisement’s implication of diarrhoea – as in ‘tummy runs’. Yes, I have a warped sense of humour.

My company maintains KOLs in China. One such opinion leader is Larry Wang from ‘Wang & Li Asia Resources’. His company, a recruitment and executive search company, was awarded the title of ‘Recruitment Firm of the Year’ at the China Staff Awards in 2008, beating international competitors including MRI Recruitment. Larry has personally written books on the development of staff within organisations in China and is regularly asked to speak in front of HR managers across China. In essence, he is a leading expert in the field of human resources. So when Larry says that he “admires ClarkMorgan” in public, and highlights our success, people listen. I know this because I’m often part of the same audience. At the 2009 ‘TalentPole’ conference in Shanghai on ‘Retention and Rewards’ Larry took a moment to cast the spotlight on my business for a few seconds, informing 60 senior HR professionals of our own achievements in the field of training and development.

So when Larry says that he “admires ClarkMorgan” in public, and highlights our success, people listen.

Of course, I could have boasted about receiving ‘Training Firm of the Year’ two years in a row, however, it would have sounded like blatant and arrogant self promotion. When a KOL says it, it becomes unbiased and credible. The charity 51SIM goes one better than that with their KOL. They have former US president, Bill Clinton. 51SIM, which promotes a ‘Sustainable Innovation Movement’ in China, features a video of Mr. Clinton thanking 51SIM co-founder, Daniel Foa, and praising the work done by the charity in China. The former president then hands Daniel a certificate of appreciation from his own charity, the Clinton Foundation. The value of Mr. Clinton’s endorsement to the reputation of 51SIM is obvious. Nevertheless, your own ‘Larry’ is also valuable.

WOMBAT Selling

This value comes from contracts directly linked to your KOLs’ endorsement. Because KOLs influence others to buy, it is of strategic importance to get your KOLs and potential clients together in the same room, talking to each other, as often as possible. Michael Hewitt-Gleeson, introduced this acronym in his 2006 book titled ‘WOMBAT Selling’. WOMBAT Selling, or Word Of Mouth, Buy And Tell, is a catchier way of saying ‘referral’, which is why your sales team will remember it.

Here’s an example of WOMBAT Sales. Back in 2007 I bought an HTC Touch mobile phone. I never saw any advertising, nor was I approached by sales staff. Rather, Sheldon, my colleague had one resting on his desk one afternoon. It was a cool looking phone, with a large screen that predated the Apple iPhone’s launch by almost a year. I asked Sheldon what he thought of his high-tech looking mobile and his positivity and excitement caught my attention. Within two weeks I had bought my own. WOMBAT Sale number one. Some two months later, another colleague, Nigel, saw me playing with my HTC phone. After he asked, I responded that I “loved it!” and a week later he was WOMBAT Sale number two.

WOMBAT Sales take no energy on our behalf. In fact, we do it all the time without thinking, by boasting about our favourite hairdresser, restaurant, or movie. We also do it less obviously by wearing their brands on our body. So how do you promote WOMBAT Sales in your organisation? You follow our lead. My company went from a virtual unknown in 2002 to its first ‘Training Firm of the Year’ award in 2007, only five years later. Part of our success was linked to WOMBAT Selling. From early 2006 to late 2008 our marketing team arranged monthly networking events in bars and restaurants. They also arranged monthly training demonstrations in five-star hotels and business centres, which we continue to this day. For this three year period, we maintained eight offices, which meant we were creating as many as 16 WOMBAT Sales opportunities each month. Each event would attract as many as 120 participants, which were roughly comprised of 25% current clientsand 75% potential potential clients. This equated to an opportunity of WOMBAT Selling to1400 potential clientsa month, or 16,800 per year.

One such WOMBAT Selling event that sticks in my mind was held in August of 2008. Andy Anderson, the Events Manager, secured ‘Sugar’, a dessert restaurant and bar in the upscale Xintiandi bar and restaurant district in Shanghai. The space had an official capacity of 60, but on the night over 80 people attended.

All our sales team had to do was play host and our KOLs conducted WOMBAT selling our behalf.

Again, there was a similar 1:3 ratio of current current clients to potential clients, and the mood was perfect for networking. As the participants made candy animals from sugar-based dough, my sales team wandered between the groups, introducing new faces to regular clients. KOLs from SAP, BHP Billiton, Morgan Stanley, and Li & Fung, were casually introduced to other potential clients in a fun and relaxed atmosphere. All our sales team had to do was play host and our KOLs conducted WOMBAT selling our behalf. As mentioned earlier, a boast always sounds better coming from a happy customer, than your own mouth, and our KOLs were doing a great job building our reputation. The return on investment for that event was approximately a multiple of 50.

Key Internal Influencers (KII)

Now while getting in front of a customer is the ultimate goal in business, sometimes these important people are too busy, or simply don’t want to see you, no matter how impressive you think your product or service is. This is where your Key Internal Influencer, or KII, steps in. Miller and Heiman (1988) define four ‘Buying Influences’, that is, the Economic Buying Influencer, the User Buyer Influencer, the Technical Buying Influencer, and the Coach. This forth type, the Coach, differs from the other three in that this role is supportive. Rather than blocking your sale, they add weight to your message and because they are independent from your business they can be far more persuasive than any of your company information found on your brochure, website, or within a DVD. This ‘Coach’ is a Key Internal Influencer (KII); another synonym in the sales and negotiation book of jargon. There is, however, a difference between the Miller and Heiman ‘Coach’ and my KII.

More often than not a KII doesn’t realise that they are representing your best interest back in their workplace. A ‘Coach’ is always aware of their support.

More often than not a KII doesn’t realise that they are representing your best interest back in their workplace.

A KII could be your potential client’s, assistant, or colleague. Regardless of their position in the potential client’s company, their opinion is highly valued by the potential client, and hence they can aid in building your company’s reputation. During the Clinton presidency, the First Lady, Hillary Clinton, was wooed by numerous lobbies, charities, and organizations due to her closeness to the President. These groups tried to get their message included in ‘presidential pillow talk’. Here’s a joke to further my point:

During the Bill Clinton’s presidency Bill and Hillary decided to go for a drive to see the countryside. During their drive Bill, who was driving, realised he was almost out of petrol. He pulled into a tiny petrol station where a man walked out of the store to help them. Hillary looked up and screamed with obvious glee.

“Harvey! Is that you? I can’t believe it!” Hillary jumped out of the car and gave the man a big hug. Bill watched as they proceeded to talk for a number of minutes. When they were finished talking Hillary returned to the car.

“Honey, who was that?” asked Bill.

“That was Harvey, an old boyfriend of mine,” she responded. “We dated for a long time, and almost got married.”

“Wow, just think,” said Bill. “If you had married him, today you would be the wife of a gas station attendant.”

“No,” said Hillary bluntly, “Harvey would be the President of the United States!”

The key is not to ignore the KIIs. They can often be linked directly to the success of your potential client or at the very least, offer advice to the potential client decisions are difficult. They are also generally easier to approach than the potential client because they are often less busy, or are more accessible after working hours. Many of the attendees of my company’s WOMBAT Selling events are actually KIIs. Their boss, the actual potential client, is often too busy to attend such events, and so knowing this, we aim to impress their junior colleague. These colleagues generally do not have family commitments that prevent them from attending evening events. However, they are no less important. When we ran an event in each of the 8 cities, we ensured that we saw hundreds of KIIs a month. The next day, in hundreds of tea and coffee rooms across China, those attending KIIs would WOMBAT Sell my company to their elusive boss, the potential client. This indirect method of getting to the decision maker has proven financially rewarding for my business, and is almost completely ignored by my competitors.

So now that you are familiar with goodwill and reputation, we can now measure the level of trust a potential client holds for your company.

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One Response to “Reputation’s worth more than the last hundred million dollars” – Rupert Murdoch

  1. Grant says:

    Very valuable information. I particularly like the key internal influencers concept and will be using this idea in my business.

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