Giving business a lift
Editor’s note: David C. Lang is president, and Catherine Zacchi is senior writer, at Markinetics Inc., Marietta, Ohio.
As W. Edwards Deming said, "Learning is not compulsory...neither is survival." Conducting research is one way businesses can learn, survive and thrive.
Through competitive positioning research, for example, a company can delve into the perceived strengths and weaknesses of itself and the competition. But benefiting from that knowledge requires a willingness to change, as Waltco Truck Equipment Co. discovered.
Founded in 1954 as a division of Waltco Engineering, a parts manufacturer for the aerospace industry, Waltco Truck Equipment manufactures heavy and medium duty liftgates for the trucking industry. The liftgate manufacturer gradually grew into the market leader, with one close competitor in an otherwise fragmented field. In a flat market, Waltco can grow its leadership position only by taking market share from competitors.
"We had long used secondary research such as truck sales figures," says Rod Robinson, president of Waltco Truck Equipment. "We conducted in-house marketing projects, sending marketing and sales representatives to get feedback from our major customers, chiefly on design enhancements and support services. But when we started looking at spending three-quarters of a million dollars on product upgrades, we decided to turn to an objective third party, professional researchers, to see whether the market data supported what our instincts told us was right."
Waltco selected Markinetics Inc., a Marietta, Ohio, marketing research, planning and communications firm with experience in the transportation industry. Using the multimedia capabilities of its Automated Survey and Processing System, Markinetics developed surveys showing the new products and asking questions about them. The touch-screen system collected hundreds of responses from target market attendees at key industry trade shows. While generally confirming Waltco’s instincts, the research information and recommendations provided valuable data to aid tweaking of products, positioning, pricing and promotions.
Negative findings brought forward by an objective third party invite less suspicion of hidden agendas, Robinson says. By using an outside resource, Waltco was able to quickly move past the motives of the messenger to focus on the message.
Based on their first experience with primary research, Waltco management decided to use Markinetics to conduct a competitive positioning study. Waltco felt assured that the information it received would not be filtered through the interests of its representative. In addition, customers and distributors taking part in the research could also feel more assured of confidentiality from an outside researcher than from a company representative. The expectation was the confidential, objective interviewer would be able to collect more detailed and candid information.
Decision makers targeted
Targeted research respondents were decision-makers and influencers responsible for specifying, selling, servicing or using liftgates. They were drawn from key market segments served by the company. Given the scattered locations and hectic schedules of the target decision-makers, focus groups were ruled out as impractical. Instead, Markinetics conducted one-on-one, in-depth telephone interviews lasting 20-40 minutes, depending on the depth of the answers. The telephone format also allowed the addition of a second or third decision-maker within a company without the added travel costs that in-person interviews might have entailed.
Markinetics’ Senior Consultant Bob Higney designed and conducted the interviews, did the analysis and, with other Markinetics personnel, developed the recommendations. "Every research project begins with three fundamental questions," says Higney. "What do you really want to know? Why do you want to know this? What do you plan to do with the knowledge once you have it? Waltco’s concerns were qualitative – answers to ‘why’ instead of quantifiable statistics to measure ‘what.’ "
Objectives for Waltco were to gain insight into the following:
- What are the market’s attitudes toward and perceptions of Waltco? Why?
- What does the market consider to be Waltco’s strengths and weaknesses? Why?
- Of these perceived strengths and weaknesses, what does the market consider important? Why?
- What does the market feel Waltco does better than its competitors? Not as well? Why?
- How do customers like doing business with Waltco? Why?
"Because of our limited interview time, we had to home in on specifics quickly," says Higney. "First, we organized part of the interview like a company report card with six or seven essential variables in the areas of manufacturing, engineering and customer service. Using the report card as a basis for discussion, we probed to find out why a particular grade was given."
Too often, research follows a pattern of question-response-next question. That approach yields "facts but no insights," Higney says. The key to qualitative research, he says, "is looking behind the face value of the answer. When the interviewee says ‘This manufacturer is unresponsive,’ the interviewer says ‘Tell me more.’ You probe to define the ways in which the company is unresponsive. It could be the company doesn’t attend trade shows, or doesn’t call on this particular account as frequently as the interviewee would like, or doesn’t return his telephone calls."
Better relationships
The competitive positioning study revealed that the marketplace was not yearning for better product, but better relationships. "In general, the research confirmed some of our intuitions, but we also found some surprises," says Waltco’s Rod Robinson. "We weren’t as deficient in some areas as we thought we were. Certain issues we expected to be raised, such as delivery, didn’t come up. We weren’t as good in some areas as we thought we were. The results show us what the marketplace perceives as important, so we can direct our resources there."
Target audiences indicated Waltco and its nearest competitor have good products and good people, with some giving Waltco the edge in quality and innovation. Since either brand would do the job, the marketplace based its selection on relationships. It wanted "face time" with sales staff, engineers and management. It valued quick and effective response to problems.
The competitive positioning research recommendations were that Waltco:
- could gain advantage by generating a different training approach to meet training concerns of key market segments;
- review its policies and procedures to deal with identified concerns and problem areas;
- work to improve its relationships with its accounts by enhanced accessibility and visibility of its management team; and
- develop an ongoing method of collecting feedback in all of the areas from its customers.
Impact of training
Waltco decided to immediately test the ability of training to make a difference with key accounts. It selected a large, well-recognized account where it had achieved only minor successes during the last few years. Some new product introductions that Waltco felt should have been well received by this customer had not gained serious consideration because of the lack of an acceptable relationship.
Waltco management moved quickly and, gaining commitment from its field sales people, developed and conducted on-site training for this customer’s service personnel. As the customer ran round-the-clock facilities, this meant the Waltco sales force worked multiple shifts. In one particularly active day, a Michigan Waltco sales manager shuttled between three account locations in Detroit, each with three shifts, conducting a total of nine training sessions. In less than five months from the start of the program, Waltco trained more than 1,100 of the target account’s service personnel.
"We developed the training to be universally applicable to liftgate types – our competitors’ as well as our own brand," Robinson says. "When possible, we used our liftgates in the training. At sites that did not have any of our liftgates, we conducted training using the competitor’s product. Afterward, we asked the trainees to fill out an evaluation. We delivered those evaluations to their corporate offices. We recently received a major order from them. That training was cited as a decisive factor."
Says Waltco Marketing Manager Joe Halpin, "We had to have both product and training. We would not have been successful with either one alone."
Adds Robinson, "We identified additional training needs in their organization that we had never considered before and we are now making changes to address them. The training has been so valuable that we are rolling it out as a value-added program to other accounts where we are already the primary supplier."
Policies and procedures
During recent years, Waltco has instituted a number of new procedures to improve efficiency. The company is now revisiting those procedural changes to ensure that their implementation hasn’t created an unwanted side effect of making things more difficult for its customers. Minor changes have already been made in some areas and major changes in others.
Before the competitive positioning research, Waltco had revamped its warranty claim processing to be more efficient. The company was surprised, therefore, when target audiences rated its warranty response as less than stellar.
Waltco traced the problem to two sources. In some instances, internal Waltco representatives evaded customer ire by inaccurately disclaiming authority to make warranty decisions at a field level, placing the blame on Waltco policies. That, says Robinson, underscored for him the advantage of conducting research through an objective third party instead of relying on internal sources who might have their own interests to protect.
The second problem was what Robinson describes as "a black hole" in warranty response tracking. Completed claims were processed quickly, but claims missing information were shunted aside to an exception stack, where they were no longer actively tracked. Waltco is now implementing a new tracking system that requires a formal written response to all claims, even incompletes, within a specified number of days.
"We found that often, we had informally contacted people about their incomplete claims," says Robinson. "We would tell the service manager who submitted the incomplete claim what was needed, but he would not always inform accounts receivable and say, hey, I had to resubmit that claim. The information was not being passed along to everyone who needed to know. Now we formally notify the accounts receivable person that we have a warranty claim that cannot be processed due to incomplete information."
Personal visits
In the competitive research, some interviewees had described Waltco upper management as less accessible, even aloof. "We were so busy running the business, we didn’t spend as much time with customers as the customers wanted," Robinson says. Now, managers are responsible for making personal visits to assigned accounts at least twice a year.
Robinson also changed his approach with sales representatives. "We’d always said if the salesperson needed us to go with them on a call, let us know and we’d go," he says. "I realize now if I sit in my office and wait for them to call, I’m not going to see these customers. Now I tell my sales people ‘I’m going to be in your area from this date to that date. Here are major customers I’d like to see with you. Make use of my time.’ Already in the first quarter of a year-long program, we’ve made some visits we would not have made before."
Waltco also decided to stay in touch with its many customers and to measure how it was doing by using the Markinetics’ Market Ongoing Research and Evaluation (MORE) program. Under this program, Markinetics talks each month with customers in each of the market segments. Results are reported quarterly, with analysis and recommendations to be provided biannually. Piloted at the end of 1997, in 1998 MORE will provide a consistent way to gain feedback and measure progress throughout the year.
Following through
Waltco is in the early stages of following through on the recommendations. But with the intelligence gathered by objective research, it has the advantage of knowing which battles it needs to fight. "Research is meaningless unless you’re willing to do something with it," Robinson says. "You have to commit to take action on what you find out. Initial results have been outstanding. Markinetics is already finding positive differences in responses received in our ongoing feedback program. We were a good company before. Research provides information we can use to build a better company."