| Issue 65 |

Starting from the End

One of the most effective ways to overcome difficult problems, or to plan complex processes, is to start from the end. In order to do this, you need to go through the following steps:

1. Define the end step you want to achieve – The future result you want to attain (how things will look when the problem will be solved or when the process will be implemented, etc.). Also set a target date. For example:
   • Two years from today, we will offer products at a 6 Sigma quality (no more than one defective product for every million products we supply to the customers).
   • 80% of our sales will be for foreign markets and only 20% for the domestic market, in 2015.
2. Define the intermediate stage that will take place just before the end, and what you need to do to move progress beyond it. For example: :
   • One year from today, we will provide products at a 5 Sigma quality (no more than one defective product for every 100,000 products we provide to customers). In order to improve even more and achieve a 6 Sigma quality – we will send the Quality Manager on a one-month course, subsequent to which we will implement 6 Sigma processes in the organization for five months, during which we will attain 6 Sigma quality.
   • 60% of our sales will be to foreign markets, and only 40% domestic sales, in 2014. In order to reach 80% foreign market sales while maintaining our scope of domestic sales, we will set up a distribution center in Europe, probably in Holland. We will also hire two more salespeople to work with the distributors in Europe and Asia.
3. In a similar fashion, define even earlier intermediate stages , until you reach the beginning – the status quo.
   Examples of the first stage from which you can embark:
   • Six months from today, we will be at a level of four Sigma (no more than one defective product per 10,000 products that we supply). We are currently only at 3 Sigma, even though we have implemented quality management processes and ISO standards at the factory. In order to improve, we will conduct a continuous improvement process by setting up quality teams at the factory, with the help of an external consultant.
   • 20% of our sales will be to foreign markets in 2012. In 2010, our foreign market sales were a mere 10%. In order to improve, we will hire a full-time business development manager, and he will help us find and begin work with good distributors in three new European countries and one in Asia in 2011. We will also adapt our product mix to the needs of European customers. These efforts will likely come to fruition in 2012.
4. Check what can go wrong in the “End to Beginning” work plan you have prepared (antiquation of factory equipment, changes in foreign exchange rates, etc.) and plan appropriate safeguarding steps (receiving a government grant to buy new equipment, commencing manufacturing at subcontractors abroad, etc.).

The advantage in using the “End to Beginning” method is firstly a psychological advantage. You start with “the light at the end of the tunnel”, and this energizes and motivates you to plan step after step, in reverse, up to the (problematic) status quo.
 

Sales Strategy

Once we know what we are selling and to whom, we should think about how we plan to do it. We need to have three goals:

1. To reach the maximum number of potential customers

2. Of the customers that we have reached, to achieve the maximum number of sales processes that end in success Remark: Success means only one thing – money in the bank!

3. To maximize our revenues and profits from every successful sales process

These goals may seem obvious and complementary, but in reality, they can contradict each other.
 

For example, let us examine collaboration with a large company that will sell our products. It may appear that we are succeeding in meeting goal number 1. This company’s manpower will enable us to reach a maximum number of customers (we also have to ask whether this agreement does not prevent us from reaching a different larger group of customers, such as customers of the large company’s competitors).

And what about goals 2 and 3? Will these sales processes end in success? Will the large company’s salespeople know how to close deals based on our products? Is it worthwhile for them to close such deals (with regards to personal rewards)? What percentage of our revenues and profits are we waiving in such a deal? Is it worthwhile for us? What direct and indirect sales expenses are we saving due to this agreement? And, if we do not sign the agreement, what are our alternative sales avenues?

But, you will say, we have only just begun. How are we supposed to know the answers to these questions? Even if we have done similar things in the past, the market changes, conditions change. We are not even certain that our pricing is correct. It is almost impossible to answer these questions at this point.
 

And I say: You are right. You will probably not be able to answer these questions accurately, but they are important because they will help you understand what you may gain or lose in each step. It will be much clearer to you (even if not with 100% certainty) what you should do, what the risks you are taking are and what opportunities you are waiving.
 

Even if you cannot answer the questions, at least you will be able to know the limits of your knowledge, which is also important. Quantifying the answers to these questions will help you set goals for negotiations with the large company. You will have an idea about the amount you should sign on. You will also know what your alternative are if you do not sign the agreement, which is important in every negotiation..

Another issue that needs to be considered from all angles is how the collaboration agreement with this company may affect additional elements of the company’s operations. Can it help or hinder in recruiting investors? Can it help you sign an improved contract with an important supplier? Can it help increase the faith customers have in the company’s stability, reliability, and the quality of the product?

An agreement with a company is only an example of the options you will need to consider when you start developing your sales plan. But every other option you think of– direct sales, working with distributors – can be examined with the three goals described above. The answers will change according to the nature of the product and the industry.

• The column was written by: Neta Weinrib, an expert on marketing technological products. Information about Neta appears here.
• More information about marketing assistance for technological products appears here.