Designing and selling the “best” product isn’t enough if your customer doesn’t see the product the same way you do.  Even managers, salespeople and other company reps who interact frequently with customers don’t always know what their customers are thinking or what they want.  Managers are busy attending to business, so they don’t have time to listen to the customer.  And often customers don’t or can’t clearly articulate their needs.

Qualitative research such as in-depth interviews or observation can reveal customers’ emotions and experiences.  Such research often yields rich insights that can dramatically improve product design, marketing or retailing.  For example, observing customers while they use the product can reveal customer behaviors that impede product performance.  In-depth interviews can reveal brand or product image associations that managers were not previously aware of.

Developing rapport and trust during an in-depth interview is critical.  Separating the interview from a sales context and conversing about topics not directly related to the product can help make the customer comfortable enough to speak freely.  During an interview, customers can be asked basic questions about perceptions of products or brands, shopping behavior and product usage.  Creative questioning techniques such as word association exercises can help customers express ideas that are more deeply held.

Trina Sego, PhD
Professor of Marketing, Boise State University
December 2009

When brainstorming in a group setting a good technique for keeping the discussion going it to adopt the phrase “yes…and” instead of “but” or “no…but”. A good way to put this into practice is to decide beforehand to use “yes…and” whenever the conversation moves from one person to another. It might feel a bit strange at first but the end result of your session will most likely be superior to a conversation filled with “no’s” or “but’s”.

Jenny Sternling
Business Improvisation Instructor
Boise State University – Executive MBA Program
jennysternling@u.boisestate.edu
October 2009

Definition
Net present value (NPV) is defined as the total present value (PV) of a time series of cash flows. It is a standard method for using the time value of money to appraise long-term projects.

Formula
Each cash inflow/outflow is discounted back to its present value (PV). Then they are summed. Therefore NPV is the sum of all terms     Rt/(1+i)^t     where:

t – the time of the cash flow
i – the discount rate (the rate of return that could be earned on an investment with similar risk.)
Rt – the net cash flow (the amount of cash, inflow minus outflow) at time t

What NPV Means
NPV is a decision model that measures how much value an investment or project creates for the firm’s owners above the opportunity cost contained in the discount rate. With a particular project, if Rt is a positive value, the project is in the status of discounted cash inflow in the time of t. If Rt is a negative value, the project is in the status of discounted cash outflow in the time of t. Projects with a positive NPV should be accepted. In financial theory, if there is a choice between two mutually exclusive alternatives, the one yielding the higher NPV should be selected. The following sums up the NPVs in various situations.

If…	It means…	Then…
NPV > 0	the investment would add value for the owners	the project may be accepted
NPV < 0	the investment would subtract value from the owners	the project should be rejected
NPV = 0	the investment would neither gain nor lose value for the owners	We should be indifferent in the decision whether to accept or reject the project. This project adds no monetary value above the opportunity cost of funds used to invest. Decision should be based on other criteria, e.g. strategic positioning or other factors not explicitly included in the calculation.

 

Harry White, PhD
Professor of Finance, Boise State University
June 2009

The idea of cross-functional work teams – where employees from different parts of a company work together to develop new products – often conflicts with the status quo.   But it doesn’t have to.

Business firms tend to organize people by skill areas: marketing people work together, finance people work together, and production people work together.  So to take one person out of each area and create a new team is contrary to “how things are done.”

Segmenting areas by marketing, R&D or finance puts people into silos.  Each functional area does its “job” before passing a project to the next area.  For example, an idea starts as an innovation from the lab.  Then it goes to engineering where it becomes a working prototype.  Next, the manufacturing unit builds the product at low cost before the marketing group sells it…and so on…

More firms no longer follow this simple linear process.  Instead, by using cross-functional teams and forcing different departments to work together in real time, firms see cost-savings and also boost creativity and spontaneity.  An additional benefit to firms is the ability of the cross functional team to leverage a sturdy but lean workforce without sacrificing quality, while saving money and strengthening the bottom line.

Nancy Napier, PhD
Professor of International Business, Boise State University
May 2009

Dr. Napier teaches in the Executive MBA Program and hosts Idaho Business Matters on Boise State Radio.  This tip comes from Dr. Napier’s course sessions in the EMBA Program and her radio show.  Thanks to Boise State Radio for sharing this tip from the program, Idaho Business Matters, on NPR 91.5

Managers often say they need help teaching their salespeople to close–they just aren’t converting prospects to customers.  As many of our Executive MBA participants pointed out in last month’s session, closing often isn’t the problem. 
 
Professional selling is a series of steps and many models, such as the one below, indicate that “closing” is a very late step in the sales process.  More often the problem isn’t with closing–it lies in one of the two earlier steps: Prospecting or Face-to-Face meetings.
 
If the problem is prospecting, then your salespeople aren’t seeing the right people.  No matter how good they are in front of a prospect, if it is the wrong person or company, their sales totals will be poor.  Face-to-Face problems typically mean your salespeople have poor questioning techniques or poor presentation skills.  If your salespeople get a lot of price objections and their sales are low, Face-to-Face could indeed be the source of the problem.  That combinations of symptoms typically means they are not building sufficient benefits in the customer’s estimation to offset your price.

The Sales Process

Kirk Smith, PhD 
Associate Dean, Executive MBA Program
April 2009

Make your presentations memorable by improving your PowerPoint slides. In an attempt to provide information, presenters often create cluttered slides. This distracts the audience from your message; they try to decipher the slides instead of listening to you. Create powerful, simple visual slides and put number-heavy tables and wordy descriptions in a handout. The audience will thank you and you will benefit when they understand your message.

Kirk Smith, PhD  
Associate Dean, Executive MBA Program
MARCH 2009

Bad Slide / Good Slide Example

Dr. Smith offers this tip from Presentation Zen, by Garr Reynolds, New Riders, Berkeley, CA, one of the books used in the Executive MBA Program.

View the full Good Slide / Bad Slide presentation by Garr Reynolds
Find the Presentation Zen book on Amazon.com

When dealing with clients, employees, or colleagues from other cultures the best advice is to not assume their culture is the same as ours. Americans use idioms a lot and people from other countries have no idea what we are talking about.  For instance, suggesting “Going Dutch” for lunch would be very confusing to a German colleague who may think she had to change her clothes before going out.  So when entertaining, hosting meetings, or going abroad read and research as much as you can about the culture you will be dealing with.

Nancy Napier, PhD
Professor of International Business, Boise State University
February 2009

Dr. Napier teaches in the Executive MBA Program and hosts Idaho Business Matters on Boise State Radio.  This tip comes from Dr. Napier’s course sessions in the EMBA Program and her radio show.Thanks to Boise State Radio for sharing this tip from the program, Idaho Business Matters, on NPR 91

You can improve the effectiveness of both your written and oral business communication by framing your messages in the perspective of your audience — by making them ‘audience-centric.’ An easy way to make messages more audience-centric is to reduce the use of “I” and increase the use of “you” or “we.” To illustrate: instead of saying, “I appreciate your effort”— which describes how the writer/speaker feels — speak directly to the audience and say, “Thank you for your effort.” Audience-centric messages resonate more with readers or listeners, which increases the odds that the message will accomplish its objective.

Patrick Delana, PhD
Coordinator of Business Communication, Boise State University
January 2009