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ABSTRACT

You may use this paper to examine the relationship between a company’s sales performance and the competitiveness of its products both in terms of cost and functionality.

The paper ultimately focuses on the issue of using Intellectual Property to assure a level playing field and how to use it as a tool to increase the proportion of sales “wins”.

Most of the information provided here is for a department-specific extension of the business planning process. It basically supports the extraction and use of those specific goals that the company has outlined that fall within the realm of IP.

A person with business planning experience may easily revise the concepts explained in this paper to apply to other corporate groups whose function spans multiple departments.

INTRODUCTION

The nature of today’s networked marketplace, especially for products that are technologically based, helps the theft of ideas. Many competitors blatantly copy or otherwise obtain the creative work of others and resell it.

It is the aim of Intellectual Property (IP) protections to curb this unfair competitive behavior, especially if there is a tangibly negative affective effect on sales.

There are many techniques to use IP to curb cheaters, but it may be difficult to address all the threats at once. The techniques described here introduce techniques to combine the often-unrelated specialties of the Sales and Legal professions to improve a company’s overall performance.

We will illustrate how an IP Group may use a standard “Win-Loss” sales report to sharpen a company’s IP prowess. The desired result is to make improvements to its competitive position.

USING WIN-LOSS INFO

The main tool that this technique uses is a company’s Win-Loss report. It’s not often that a company’s IP Group has much use for the results of this type of report. However, there are several effective ways to apply this unlikely set of data to improve financial performance.

Normally, in the realm of sales performance analysis, the Win-Loss report supports answering the question, "When we lost a deal, why did we lose?”  More importantly, it also answers the question, "When we won a deal, why did we win?"

Normally, a Marketing Group conducts a well-structured internal analysis of wins and losses that they then use to improve sales and marketing results. But with a few changes, an IP Group can use that Win-Loss report to enhance their Intellectual Property (IP) planning process.

When analyzed from an IP standpoint, the IP Group can adjust the Win-Loss report to answer questions like “When we lost a deal, did we lose it because of a product shortcoming or because some of our IP was copied by a competitor and then offered at a lower price?”

And conversely, answering the question, “When we won a deal, did we win it fairly because of the superiority of one of our products or services?” is just as important.

By using a team to make proper adjustments to the Win-Loss reporting process to provide this information, a company’s IP group can develop a strategy to focus resources on these categories: 1) Competitors who are infringing on their IP and 2) Areas where the company needs to adjust their IP to enhance competitive advantage.

RE-STATING SALES DATA

An example of a report adjustment: The Win side of the report shows that a recording studio company’s video processing product has as a group of features that allow the completion of video edits in half the time with half the overhead of completing products.

By having the IP Group analyze the report they would know that they should prioritize “fast video processing” technology. It should be the next candidate to add to the patent portfolio.

Conversely, the Loss side of the report shows that a competitor is “knocking off” a function contained in a top selling product. As a result, the IP group knows where to look within the patent portfolio to assert patent infringement claims against a competitor. In other words, “Focus the IP where the money is!”

We have seen one planning decision repeated many times. Specifically, upon implementing the above changes to the reporting process, planning teams often note that they should provide one more piece of information to an IP legal group.

This commonly used report substantially increases leverage when setting priorities. Many managers know this his report as the “Product/Service Revenue Contribution Report”.

IP Groups seldom look at this report and there are also others that we will look at next.

REVENUE CONTRIBUTION

Considering each product’s revenue contribution can greatly enhance a company IP’s competitive-facing power. One example is the rapid creation of “damage control” programs. These programs focus the application of IP law to limit damaging activities of competitors.

To support this, IP Groups should always have a copy of the “Product/Service Revenue Contribution Report” on file! The team may then use this report to develop a cross-reference with the “Win-Loss Report”. Results enable the development of a priority matrix called the “IP Focus Report”.

As effective way to enhance the IP Focus Report is to provide items like the following to unbiased surveys of key prospects who have received recent proposal activity:

• Which product/service features allowed the win?
• What percentage of the deal hinged on these features?
• Overall, what did the prospective buyer see as product/service key attributes, even if they did not actually win the deal?
• What did a competitor offer in the way of a product or service that caused them to win?
• Did a competitor’s winning product/service offering match one that the company proposed?
• Overall, what product/service shortcomings caused the loss of the deal?
• If nobody won the deal, why did this occur? Was there something missing from the product/service proposal by all competitors?

The IP Group then uses the responses to sort the IP Focus Report into segments. This will support the goal-setting process for the coming year.

ONGOING ANALYSIS

If needed, the IP group may need to step up and directly analyze the results. This is if sales and marketing cannot help in making the necessary changes to the CRM reporting system.

Even if an extra expense is necessary, having this information available will increase the IP effectiveness enough to justify this choice.

Over time, as the team reviews the responses across multiple sales deals, they will help expose win-loss trends so that the IP Group can change its strategy accordingly.

IP groups should adopt a discipline to analyze Win-Loss reports in a matrix with product/service offering revenue trend data. This will uncover even more focused insights.

The IP Group can easily integrate these trends as goals in their business plan. They may use the data to justify both internal project planning and budgetary allocations.

In addition, if a campaign becomes necessary to limit the actions of a competitor, the basis of damages will be known in advance. Then the IP Group may use them to support IP negotiations with a competitor.

PROCESS FOCUS

Below is a diagram of the process areas that take part in providing an IP Group with sales information as an IP effectiveness planning tool for an enterprise. The information previously covered involves active participation in the areas shown on the diagram.

Of course, if IP issues expand enough to require the participation of more groups, the process interactions will increase accordingly.

• Win-Loss Report
• Product Revenue List
• Customers
• The Competition
• IP Legal

CONCLUSION

In summary, by paying particular attention to the circumstances under which the buying process occurred, the team may analyze product/service offerings more accurately.

The IP Group may then decide the best way to set the necessary priorities to adapt to the marketplace in the future.

When an IP Group then becomes less isolated from the happenings in the marketplace, it can reduce the wasted effort associated with the often practiced “portfolio numbers game”.

IP specialists should create plans that use sales trends to support their decisions. Staying competitive should be the primary aim. Never add unsupported and expensive “fluff” to a patent portfolio.