Saturday, January 23, 2010

Assessing Intangibles in Turn-Arounds

Determining how customers view product intangibles is easy in turn-around situations. The usual problem is that many of the intangibles no longer relate primarily to the product. Instead, they concern the company's performance. Typically in turn-arounds, most of the intangible aspects surrounding the company turn negative.

For public companies, with highly publicized financial difficulties, the sales force/channel will often spend most of its time trying to answer intangible objections about the company's performance and longevity. In addition, most product advertising is wasted because tangible product claims are overwhelmed by intangible concerns. Here, the challenge is to find ways to reverse the perceived decline in non-product intangibles. Often, a refocus on product intangibles is the most effective way to accomplish this.

The most difficult task facing management of a turn-around is objectively determining the company's current perceptual strengths and weaknesses. Turn-arounds are characterized by attempting to effectively deal with past failures. Failure is an emotional issue. Consequently, determining current perceptions and the areas requiring improvement is something most difficult for existing employees and managers to accomplish. Experience, objective external support is almost always required.

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