THIRD PERSON TEACHING GUIDE

These materials will help you present an abbreviated version of Gary Kunath’s core ideas to a group of co-workers (or, of course, to others – a service organization, a school or faith-based group, or members of your family, for example).

Through this process of third-person teaching, you not only expand the reach of valuable ideas; you also clarify and reinforce your own understanding.

You can use this entire third-person guide, or present only those parts of it that you think would be most relevant for your audience. We have tried to create charts and text that make it relatively easy for you to conduct your presentation; however, if you are unsure about certain content, you should refer to your tape of the session or your notes.

The charts described in the text below are available here for you to download.  Bold items in the following text are words that appear on the charts.  

About The Presenter

Gary Kunath heads the Summit Group (www.summitvalue.com), an Atlanta-based firm that works with Fortune 1000 companies to achieve sales force superiority and train sales organizations how to effectively develop unique business value for their customers.

He appeared at The Masters Forum on October 8, 2002.

Introduction

Kunath emphasized that this approach can be as valuable for defining and communicating the value that a function adds to its organization as it is for offering a persuasive argument in a sales situation.

Because the example he addressed at some length – Turner Broadcasting’s pitch to Delta Airlines – demonstrates his arguments better than a general discussion, we have included charts and discussion here to help you present that example in your third-person teaching setting.

He made many other points and provided many other handouts that might be pertinent to a presentation you want to make, depending on your audience. Expand on the core materials here as you see fit.

 

CHART 1

He said that today (and increasingly), competing on the basis of product features or price will not succeed. Features can be duplicated by your competitors or matched in other ways, and if you compete on price, he said, “You might win, but you’ll still lose,” because margins are being driven lower and lower by fierce competition. (He used the example that Geoffrey Colvin also spoke about in his September Masters Forum appearance, auctions among suppliers, to illustrate how buyers are squeezing sellers more and more.)

From those positions, he concludes that the way to succeed is to go beyond conventional sales approaches and to apply business principles that “provide value to your customer that transcends the product or service you’re offering.”

The way to do that, he said, is to “leverage assets within your company that will move the customer’s business.” How to do those last two things is the subject of much of his talk, an overview of which is presented in the next chart.

 

CHART 2

This chart presents an overview of four elements of Kunath’s value creation thought framework. (Kunath’s fifth element, “prove it,” is not discussed in this guide, and therefore is not on the chart.) We will discuss one numbered item at a time, with its corresponding Turner-Delta example, in this guide, but you might wish to go over all the items as an introduction. The quote at the bottom of the chart communicates the essence of the methodology.

The first question is What do they care about? You have to know what drives your customer’s business. Specifically:

What issues keep them awake at night? Where is their strongest competition coming from? What are the pressures on their margins? How do they retain their key customers? How do they value their key employees?

What will be important to them? What is their value proposition? What new initiatives are they undertaking that tell about how they are implementing their “value prop” or about how it might be evolving?

From understanding those things you can conclude, What value do they rely on to win? This should be the focus of your thinking.

This quote from Kunath’s presentation summarizes what his method is about: “How do I take what I have, wrap it around what the customer cares about, and represent it in a compelling way?”

[The next three points on the chart are covered in later charts. We proceed next to the first part of the illustrative example.]

 

CHART 3

Kunath’s example began with Turner Broadcasting, which was trying to obtain the $6 million ad budget of Delta Airlines for its network.  Looking at Delta, it was recognized that Delta, like other airlines, can’t differentiate on price or service. One of the things that keeps Delta “awake at night” is its frequent flyer program, which attracts customers but creates a big liability. (“They hate their frequent flyer programs,” Kunath joked, “and they hate you for liking them.”)

 

CHART 4

This chart returns to the overview of the value creation framework – to the second item, What Do You Have?  Kunath said the way to think about this is, “What’s in your cupboards?” He said it’s essential to involve people throughout the organization in rummaging through those cupboards to find the offerings that best meet the customer’s needs. (He provided some handouts expanding on this idea, which you might wish to use if you go more deeply into this subject. And he also said that many advanced companies – Hewlett-Packard and 3M among them – maintain databases of what each unit can offer. He gave handouts illustrating this.)

The chart shows some of the things that Turner Broadcasting had in its “cupboards.”

 

CHART 5

The third item in the value creation framework is: How Does What You Have Impact What They Care About? Kunath listed some of the more specific things a customer might care about, including: Customer Acquisition, Customer Retention, Their Value Proposition, Competitors’ Value Proposition, Finances, and Strategic Relationships.

He said that business acumen, not sales technique, is the most important qualification for selling, because even though all organizations think they are different, in fact “All businesses fundamentally operate the same way.”

The next chart continues this topic, with Kunath’s example of how Turner used what it had to impact what Delta cared about.

 

CHART 6

This shows how the offer was constructed. You may also use this chart for how to articulate a value-creating offer.

 

CHART 7

The specifics of this offer were as follows:

Turner took its MGM movie library asset and said that Delta’s frequent-flyer program members could purchase movies using their mileage points. This not only benefited Delta’s best and most profitable customers, it also reduced Delta’s outstanding mileage program obligations. Turner agreed to use its own branding know-how to help regionalize the promotion (featuring, for example, “Gone with the Wind” in the Southeast). Moreover, Turner offered to use its own production company to produce a customized introductory clip at the beginning of each video, with content of Delta’s choosing (this is the “direct communication link to build your brand’s identity and presence in front of your most loyal and profitable customers” mentioned in the previous chart). Also, because Disney is an important partner of Delta’s (and Disney was returning to its “core competency of family entertainment” with the re-release of “101 Dalamations”), Turner suggested including the promo for that film along with the video (this is the “direct communication link to build your brand’s identity and presence in front of your most loyal and profitable customers” mentioned in the previous chart).

Since Disney could be charged for this entrée to “6 million demographically aligned homes,” Delta actually would make money on the overall deal.

Delta, Kunath said, loved this overall idea so much that it called Turner back to discuss how it might structure its $60 million global advertising program.

 

CHART 8

The previous chart, tying the offer to what the company really cares about, is an example of how a value-creating offer should be articulated. Kunath offered the quote on this chart as an example of a typical, ineffective offer articulation.

He also used it to illustrate another point: That constructing and presenting an offer in the way he recommends will give you access to important customer decision-makers, at higher levels, because they can see the strategic advantage of an offer that is genuinely value-based.

You will remember the brief exercise Kunath conducted, giving the instruction that for five seconds each person in the Masters Forum audience should look around for everything they could see that was white. He then asked, “What did you notice that was green?” He said that when you look for only one thing, you will inevitably miss other, different things that are important. In some ways, the “typical” sales pitch on this page is what everyone has, what everyone expects: in the context of Kunath’s metaphor, it is “white.” But value-based offers stand out because they are different in powerful ways. Hence, for success, “See green, not white.”