The Globalization Dilemma

My present job includes "Pricing Manager" among the various job descriptions. Facing a challenge in getting IT time to fix our quoting tool (let's face it -- who hasn't had this problem at a company that is not Google?), I turned again as I have in the past to outsourcing. I have successfully used Guru.com in the past to find someone to do the work, but this time I turned to oDesk due to the nature of the work. Within days, I had found a Ukrainian developer with an amazing command of English and 20 years of experience in Java and Visual Basic including extensive work on Excel applications.

As I symbolic analyst, I often find this kind of experience troubling. When it comes down to it, most of my job could be performed anywhere in the world. I often suspect that most of the companies that hire me could find someone in India with my exact qualifications plus a Ph.D. and a background in computer science for 70% of my salary. George, my new Ukranian developer, earns $25 an hour for doing work for which I would probably pay $45 an hour at a minimum in the U.S. His English is so good that he knew the idiomatic phrase, "The devil is in the details." [Funny note of the day: in Ukranian, the literal translation of their equivalent phrase would be, "If your head is stupid on details, your legs go this way and that."]

On the bright side, this kind of internationalization means that local understanding and specialized skills can be in demand anywhere. For the market research expert in me, I find the outsourcing experience liberating because I know that some of my expertise and specialization in the U.S. consumer and B2B research market cannot be matched by someone else. Moreover, the internationalization gives me the opportunity to apply these skills to companies interested in selling into the U.S.

As a sidebar, I am in love with oDesk's awesome contractor time tracking tool called "Work Diary." It takes snapshots of your contractor's work periodically to show what they have been doing with their time. From the client's perspective, this approach gives me confidence that the contractor is working on my job when he says he is working. From the contractor's perspective, Work Diary makes it easy to track billable hours to your client and provides proof that you are billing for legitimate work if the client questions what is taking so long on an hourly project.

I foresee a future in which the percentage of work done on this kind of contract basis goes up dramatically. I can imagine that a number of companies interested in entering the U.S. market would not want to hire a market research professional full-time to do the market entry due diligence and might not have the money (or knowledge or project management abilities) to employ a full-service market research firm. These firms might turn to someone like me for a time-limited engagement that would expand their knowledge as much as they need to take the first steps in the U.S.

Overall, I think I am looking forward to this future, working on varied engaging projects for a range of interesting companies. I just have to get over my natural fear of being replaced by someone less expensive.

Category Management in B2B

Lately, I am seeing a lot of advertisements (and hearing a fair amount from recruiters) for category manager positions at business-to-business companies. There seem to be a shortage of these folks with the kind of B2B experience I have; rather, the applicants all come out of consumer packaged goods (CPG) companies. I think many business marketing organizations have finally realized that the product proliferation and price confusion is neither helping them increase sales nor helping their customers find the right solution. One need only look for products on Motorola's website to see how hard it is to find the right products among the category clutter...and this from one of the companies in our industry that has it organized well.

The main differences in my mind between CPG category management and B2B category management are as follows:

• Many B2B companies have multiple products that have to be sold as an integrated solution, making SKU rationalization more complicated;
• So many different B2B deployment environments (compared with relatively few different retail formats) require countless variations of what would otherwise be almost exactly the same SKUs;
• Configuration is de rigeur versus low configurability (except for private label goods) in CPG;
• Declaring "end-of-life" for products is harder, as the installed base for products from the distant past may continue to be sizable and upgradability for these customers can be difficult;

and last but certainly not least:

• Salespeople have much more influence over marketing than in CPG companies, in which marketing is general management.

This last point marks the crucial difference between the B2B category manager and the CPG category manager. The B2B category manager must constantly determine how to sell category changes to the distributors, systems integrators, channel partners, and even their own salesforce. In contrast, the CPG category manager largely relies on data from the retail channel and takes that data to the sales team to show them why they decided to make a change.

Ironically, both the lack of B2B end-user data and the relative power of the sales team means that B2B company category managers end up less focused on the actual end-user needs than in CPGs. Hopefully the emergence of demand for B2B category management experts indicates a change towards more end-user focus. I personally hope the rise of this group as a real discipline (already showing up years ago in industry leaders like W.W. Grainger and John Deere & Company) will mean that B2B product sets will become more user-friendly over time, which will be a real relief to those of us who have to order them, configure them, and use them on a daily basis.

"Cell Phone" Pricing

Think about your cell phone plan for a moment.  Do you have a fixed-price, all-you-can-eat type of plan, or do you have separate and confusing charges for every different type of call (international, domestic, in network, out of network, standing on your head) and service (text, data, text-to-data, data-to-text, video, videos with text, blah blah blah)?  Do you get warm, fuzzy feelings about your phone company when that bill is super confusing?

I am constantly astounded as to why business-to-business companies think that their pricing should be more confusing than their cell phone plans.  There is a reason consumers flocked to the Verizon flat-fee plans: they are easy to understand. Businesses selling to businesses should remember that their customers are, ultimately, human beings.  The more confusing we make our pricing, and the harder we make it to work with us, the less likely that those humans will want to do business with us in the future.

"But my company is the industry leader!" I hear you say. "Our customers will still work with us because we have the best products and services!"  And may I retort, "Do you really want to give your customer a reason to entertain 30 minutes with that new start-up because you are an unpleasant company with whom to do business?"  Why give the start-up competitors an opening?

This problem confounds me as I work through a new partner pricing program currently. I just hope our customers won't be more confused than I am already.