January 9, 2012
Yes, 2011 was a good year; we need to ensure that 2012 is an even better one. The economic climate will still be shaky- the problems of European debt will continue to cause uncertainty in both the USA bond and stock markets. While Technology advances will continue to cause disruptions for many organizations, a more pressing issue will be the ‘aging boomer’
Many of the current small business owners represented by this ‘boomer group’ are looking for an exit strategy. This will not be easy as many have made no plans for their future. Many have found their children not interested in flowing along in the ‘family business’ – while others have found their current key employees do not have the financial resources to make their exit feasible. All of these factors create opportunities. What should this all mean to company supplying a product or service?
How about embracing the notion of ‘Becoming a Trusted Advisor’
Sometimes the notion of being an expert is ridiculed. One scribe put it this way: “An expert is simply someone far away from home and giving advice…” Perhaps that is not an unfair comment for those who are truly misrepresenting themselves. But alternatively, what if the person is authentic and can add much to the discussion or the recommendation? If we said that person was a trusted advisor rather than an expert, wouldn’t that change our opinion and our expectations? Somehow I think so.
This is your opportunity to step into the gap. This is where you become the expert — the trusted advisor, who makes it easy to do business with because you understand their issues and their priorities. And this is how you differentiate yourself from the competition.
Education at all levels continues to be a growing market. Even within this segment there is opportunity for increased specialization. Elementary schools, secondary schools, private schools, residential schools, community colleges and universities all have concerns that are common but each also has some unique problems. Do the research to see emerging trends; ask questions of the authorities having jurisdiction to gain their insight. Be ahead of the curve. As you ask and investigate, look for non-traditional services you might be able to offer. Our industry has tended to be narrowly focused.
The issue is not so much about market share as it is about wallet share. Once you are in a facility or an organization, you are the trusted advisor.
We need to think about ‘How’ and some thoughts to consider in becoming the TRUSTED ADVISOR.
Here is what and where I would start!
Our world has continued to twist, turn and morph into something our business forefathers even a decade ago would struggle to understand. I just saw a study of customer buying preferences.. According to this work, the typical customer would rather gather information on the web rather than deal with a live salesperson. This means that they would rather gawk at Google rather than talk to Willy, the account manager. When the web first appeared, the very successful sales type often referred to themselves as the human search engine. Customers told them what they were interested in learning about and they brought the information. This was cutting edge 10 years ago. Now when customers want their first blast of new information or where to go for solutions they use the Web and bypass the human.
A couple of items that we need to remember for they are true!
- If selling turns into a purely Web-oriented thing – most small groups will lose. The ‘big boys’ have money to invest and the funds to throw at the problem. And a web-only selling world plays to their strengths.
- Improvements in shipping and logistics have already made local inventories less of a calling card for most big projects. The Next day shipping model (now almost universal in the USA) for the customer who can even wait will be further a disruption.
- Most business entities are continuing to operate their activities with as few people as possible- lean and mean. And, yes even when you want to find the right person they are often not even available or willing to work in the type of job or industry.
Customer relationships are still important, but the ‘right stuff’ for building relationships is shifting. Our future, in fact our future growth and existence will be where we provide the things our customers (prospective ones) values in today’s environment. The real question is what can we provide that will endear us to them in the future.
Customers need us to know their business. In the past, we knew the product side of the business – focusing in on ‘the nuts and bolts’ capabilities, compatibilities, configurations and assorted new gizmos. But today this product knowledge is becoming a commodity –and a pretty low cost commodity at that.
To expand, grow and thrive into the future, we’ve got to demonstrate capacity to provide more than product expertise –and not in some loosely defined general way. Its’ our role to understand specific
processes, procedures, and components of their business better than their in-house staff. We become experts on them.We need to understand the inter-working mechanics and value drivers of their business – shifting from what they buy to how they operate. The post-recession account strategy focuses on a set of questions most of us in business have yet to explore. Here are some areas we better pay attention to in the future.
Market Position Questions
If you are going to be experts in your customer’s business, you need to understand a bit about how they make their money. Remember specifics rock; we cannot rely upon generalities. Customers are similar, but if you assume that every one of them regardless of whether they are operating in the same industry, you are sunk. You have to get trained to fetch out the answers to these questions:
- Who are the customers?
- What markets do they serve?
- Why do people buy from your customers?
- Are they the high-price, high quality guy or the down and dirty speculator?
- How does your customer find new customers and how important is it for them to grow the base?
- What do they feel are their competitive strengths and weaknesses in the marketplace ( can they
enunciate clearly what these are and why)
- Where do their profits come from? Products/service or where – what kind of activities within their
mix of activities – if they have no idea they will have trouble in the future
In our previous activities involving selling – did we ever consider these questions –the frequent use of they. People and Process QuestionsIn order to understand customers, we must comprehend their people situations. In a product-selling world, we’ve probably focused on establishing relationships and understanding some of their personality quirks. Now we need to ramp up our act and people drivers inside their business. A few questions to ask might be these:
- What is their burdened cost of labor? (by function and job description)
- Are they a union shop? What is the relationship with the union?
- Do they have issues with turnover or other management headaches?
- How difficult is it for them to find new workers?
- How do their workforce demographics affect their current and future hiring?
- Do they have a process for getting tasks accomplished? Does it contain documentation, metrics and management points?
Operations and Efficiency
Understanding the customer’s internal operations will give us an opportunity to shine. As a service organization /distributor and whatever we might do- typically we will have some inherent strength. It might be logistics, warehousing, marketing, problem solving – whatever it is. This might be strategic planning skills so highly developed that other organizations thought of them as the go-to guys for planning. Think about these as some operational questions to get moving:
- How do they track customers? Do they even know much about this process? Do they regularly follow-up even though their specific service(s) might not be needed.
- How many people must approve an invoice, touch the paper for a purchase order, receiving and accounts payable – and so forth. What changes to save ‘money’ could be done?
- How advanced is their inventory management and logistics – how many sku’s are gathering dust. How is their housekeeping? Clutter will suggest problems and opportunities.
- How do they handle technology, accounting and other ‘back-end’ tasks? Are they using the latest or simply making do with the past communication systems, inefficient lighting and so forth. Are current are the versions of their software?
- Do they use activity-based costing to measure customers, projects or other activities?
We know that you will find that in 99.8% of the cases, a purchasing agent, often even the owner could not answer any of these important questions.And Now Back to the Reality of the Sales Force – the People that might be Our (Your) Front-End
If my list of questions flashed through your mind with something like, ‘Wait a minute, Bob, our customer contacts don’t know the answers to those questions….’ salespeople definitely don’t know the answers, either. Remember for the past decade or more sales people have been busy playing human search engine. It’s nothing to be ashamed of – most customers wanted a source of product information and we provided it. Many of us added a heaping helping of Value-Add services along the way. In many cases lots of ‘free advice’ for little or no return!
However times have and are changing – for many the train has already pulled out of the station. New times require new strategies. It‘s time that those selling or involved within ant company doing B to B activities pick up some new tools. Without the ability to match the value of your organization with the needs of your customers these front line folks will lose their competitive edge. It will not happen overnight but it will happen.
A few final thoughts:
- Do you understand the value you provide to your customers
- Do you place a value on the service you provide
- Do you remember Montgomery Ward, Blockbuster, NORTEL
My guess is that the leaders of these companies didn’t think they needed to respond to new times either.
