When Elicitation is a Worth-While Investment … Getting into the mind of the grateful CEO

Elicitation is an efficient, low-risk, way to get information that would not, as a rule, be revealed by customers and endusers. But, marketing strategists hesitate to use this powerful tool. What’s the story?

Time is money. As skilled as I am in gathering information by elicitation, I still need at least 6 weeks to complete a client project. So for clients, knowledge of hidden information, must be a worth-while investment. (It is legal for me to engage in elicitation with people who work for my client’s competitors. If an employee of my client uses elicitation, it is illegal under federal law.)

In the following case example, my client was baffled by their customer’s urgent request that the client build a 2nd plant to supply them with a component. The customer said, “We cannot tell you why we know this will be a good investment.” Xcorp is the major buyer of the product produced by the customer. The client was baffled because they knew a new competitor of Xcorp could produce Xcorp’s product at a lower cost.

My work untangled the mystery. It was a case where the client needed to know what was in the mind of their customer’s enduser. When they knew, they built the plant. And enjoyed 13 years of exceptional returns on their investment.

Case example

The Case of the Grateful, Eponymous CEO

Bob was baffled by Charlie’s request. Charlie, the customer, wanted Bob’s company, in six months, to double its capacity to produce XX.

XX is a component in the synthesis of a chicken nutrient. Charlie’s company, in turn, uses XX to produce the final component. Charlie’s customer, Xcorp. uses the final component to synthesize the nutrient.

The reason Bob was baffled … He knew a new competitor was entering Xcorp’s market. Bob’s engineers told him the competitor’s production cost was less than Xcorp’s. Charlie said, “Your engineers are right. But, I’m not allowed to tell you why doubling capacity is a good investment for you”. Bob hired me to gather information to solve the mystery.

In my dialogues, with 30 knowledgable people in the chicken industry, the 24th person recommended I make a call to a retiree from his company. The retiree solved the mystery. He said:

“George, Fifteen years ago, our CEO, was expanding our firm fast by buying weaker firms. Banks would no longer lend him money. Xcorp contacted him and said: We will lend you the money you need to continue to expand.

The grateful CEO repaid the loan in 4 years.

He then told our buyer agents. ‘As long as I am in charge of this company, Xcorp is our preferred source of the nutrient.”

     Retired VP, R&D — (Eponymous) Foods

Outcome

  • Bob convinced his management to invest in doubling XX production capacity. Within two years, they recouped their investment.
  • For thirteen more years, XX retained its specialty profit margin. Then, the grateful CEO left his company’s Board. Six months later, Xcorp’s competitor announced expansion of its capacity to produce XX. And, Xcorp no longer supplied 5% more of the nutrient to Eponymous than their competitor.