Stakeholder management: Relationship expiration date

Relationships and Stakeholders

 

As all things relationships also come with an expiration date. Even though it might not be a 3-day expiration date stamped on a package it does not mean that it will not come. Relationships are basically also just a product – a product of invested time and effort. And here comes the question – when do they expire?

Drama and tears might be reserved for personal relationships but the end of a business relationship should be just as dramatic. Business today is run through leaning on a vast number of relationships and cannot be run without them. We talk about our customers, our suppliers, our partners, our broader network, our governmental links, our international relations and so on. Every business has a number of critically important relationships and an enormous number of less important ones.

Those relationships are different from a management point of view and require different policies. However, what is common for them all is that they should be a primary concern of management as developing relationships is an investment in the future of the company. They are a time and resource craving process and that is another reason why relationships should be valued high – building new relationships – when possible – costs much more than maintaining established ones and sometimes costs the company’s position on the market.

So when do relationships expire?

Relationships – no matter whether it is a B2C or B2B – characterize with mutuality. That means that they have been established because both parts believe in the benefits from the relationship. They develop in time if the benefit lives up to expectations. And they cease to exist when such benefit lapses.

In practice this means that maintaining a relationship includes not only establishing it and working on the agreed terms but actively looking for development opportunities. If we look from a B2B point of view this translates as the need to be better than competitors, to offer more revenue, both in terms of cash and image enhancement. You are not unique as a company as there are hundreds of similar companies out there trying to do better than you. That is why what you should do when working on developing B2B relationships is to focus on answering the main questions: What are the benefits of this relationship? How can we make them more salient? Is there place for development? Is there something we could add? How can we gain more from the relationship? Are there companies who can offer something better than us? How important is this relationship for our business? Can we trust each other? What will keep us together? Can we work better together?

Those questions should be answered both by management and in cooperation with your partner. Business relationships are much like personal ones. They require discussion and agreement. The difference here is that even though some of them are driven almost completely on personal basis, they are still benefit-based. If you want your business to succeed you maintain only relationships that are beneficial to you. That is why focus on value creation is more than necessary.

If we take the B2C perspective, things are generally the same. However, it happens only rarely that a company has enough contact with its customers to be able to discuss mutual benefits. That is why maintaining the relationship with your consumers requires the employment of different tools. Some of those include market research, consumer research, bench marketing, and innovation. One should of course also consider market niche, positioning, and market segment. From a positioning point of view the product should deliver what it promises – quality, low prices, high prices and prestige, etc.

However, satisfying the expectations of your consumers is not enough. Once again you should make sure that your offer is better than the offer of competition. And there are many ways you could differentiate yourself. In the last decade or so though, a certain method has shown quite good results. You should listen to your customers, understand their concerns and help them solve their problems. That means you could support the local football team or buy medicines for the nearby hospital. Doing that will add value to your product and buying will not be a random choice but a meaningful decision.

A bit of a warning here though – such an involvement can bring you great benefits and image enhancement when being an honest act but it can also destroy you if dishonesty is found by your stakeholders.

Another tool you could use to maintain your consumer segment are the very popular discount or loyalty programs. Most of the time they have proved to be quite efficient. The only downside is that they will not ensure you loyal consumers in the long run.

That you could achieve by involving them. Be transparent. Be responsible. Give them a look inside. Give them the word and let them be part of the company’s policy. No one can tell you better what your consumers want then your consumers. Listen to them and empower them. This way they will stay with the company as they will be part of it.

It is true that it is not always such tactics could be used but the ones described here are only a small part of all possibilities. Different businesses and different countries present with different challenges and very specific solutions to very specific problems. When talking about relationships generalizing is almost impossible or at least incorrect as relationships are unique and defined by a long list of factors. They should be treated as unique. Time and resources should be invested into continuous research and relationship development programs. As relationships do expire. They expire in that moment when you think that there is nothing more that should be done.

Will it be worth it to realize it the moment after?

 

DIDI

Global or local marketing strategy?

 

Today globalization means much more than travelling or drinking Cola all around the world. For companies it means a series of urgent questions and strategic decisions which are always due yesterday. A firm has generally few options – to operate locally while competing with local and global competitors, to operate globally while competing with global and local competitors, and to operate globally with localized strategies, thus to compete with global and local competitors as a local entity with the advantage of being a global company.

Each of these strategies makes sense in a certain context. Operating locally is mostly possible when we talk about small companies as with a company’s expansion its market necessarily also expands. However, there are several pluses which small companies should take advantage of. Firstly, it is fairly easy to network, create and manage strong relations with your local community. This way one can ensure loyalty and support for the business. Secondly, engaging in CSR is easy and effective. It is also incredibly visible within the community. Last but not least, one could profit from developing unique partnerships with local suppliers and other companies creating a desirable or protective business climate in the area. It is important to remember that investing in a community gives you some negotiated rights but it also gives you possibilities to control and develop your business environment.

Usually it is advised that strong and established global brands follow a global strategy. That means that a unified marketing strategy with minimal adjustments as language or other small details important at local level is implemented. Examples here are brands as Coca Cola, Harley Davidson, etc. Normally those brands have already been heavily marketed on both established and new markets so their arrival is anticipated and all values attributed to them are incorporated in consumer minds.

As great as that sounds it does have its downsides. Cultural differences, rivalry between countries or religious differences can trigger a market failure for a product marketed in such a way. On top of that one should always be on the watch for anti-globalists as their voice can be pretty loud and their arguments loaded with tragic emotion do affect many consumers and communities. Once again we could take Coca Cola as an example suffering in Asia from its way-too-American branding. The anti-American movement in many of those countries turned a few years ago into a campaign against all American products. Brands like Coca Cola were the main target.

Furthermore, global brands are attributed descriptions as impersonal, money-machines, mass production garbage, killers of culture and local business, invaders, etc.

So one could ask oneself – why market globally?

Just as mentioned above the globalization of a brand makes sense in certain cases. Marketers calculate expected profits and losses in connection to different strategies and if it turns out that losses are not expected to be major or are predicted to present a lesser cost than localizing the global strategy, it is a rational choice to go for global.

However, such a choice is quite more complicated. It also depends on what type of a product or service we offer and what are the standards in the countries where it will be marketed. Some products as toothpaste are generally expected to have similar qualities all around the world and can therefore be marketed globally with almost no necessary modifications. However, marketing something like cigarettes or alcohol which is a subject of a number or local regulations or something like lingerie the commercial of which might simply be banned in some countries as a result of moral censure presents us with a challenge. It requires consideration of a long list of factors highlighted by a thorough research of different prospect markets. That is what is called localized strategy.

In such a case a brand is built around a tight unbendable value core around which the product/service is shaped to meet market needs and requirements. Corporate policy though focuses not only on selling its product but on being accepted by local communities. That is necessary especially in controversial markets but is always advisable.

Allowing your branches to work semi-independently strategy-wise allows for local adjustments and for true involvement with the local community. Such a strategy which incorporates CSR elements benefitting local communities and developing a dialogue with them helps counteract the negative perceptions in connection to being a global brand and creates an environment of trust and mutual support. Needless to say, that will greatly affect sales.

However, there are also some cases where such a global – or multi-branch – company does not have a choice but to allow for independency and local policy for their branches. Such a case I have seen. Factors there were completely different core competences of employees, completely different customer base, different levels of popularity of company name in the two locations, different practices, different expectations and requirements of market based on some cultural differences, and so on. Incredibly enough, the goal was maximal unification – instead of maximum profit or efficiency. The result, not so incredibly, was a struggling local branch.

That is why making a decision concerning your global strategy should be based on thorough research and several major considerations:

1. What are the pluses and minuses of marketing globally?

2. What are the pluses and minuses of marketing locally?

3. What are the expectations of our main consumer base?

4. What are the needs and expectations of our prospect consumers?

5. Is our product/service replicable or it will be modified when entering the new markets?

6. What characterizes the new markets?

7. Who are our competitors? Is it at all worth it to enter certain market?

8. Are there strong local communities? Should we approach them? How?

9. Does our advertising need modification?

10. Are there some religious, cultural or other rules we should respect?

11. How will entering the new market affect our established market and our brand?

Those are just some general concerns which will likely have to be modified in accordance with your specific business, product, and of course market. The main point is that in marketing there are no simple decisions as the right decisions are based on facts, data, and prognoses. 

That is why no matter the size of your company or the budget you have, do yourself a favor and spend as much as needed on strategy. Otherwise you risk spending more on failed strategy.

DIDI

Front desk no-go: not knowing is not okay

Case   The secretariat is asked to give information about who within the organization manages a specific business area. The secretary’s answer: “The person you are looking for is… . You can find them on the following number and e-mail address.” “I am not sure who the manager responsible for those projects is. I will check and get back to you/I will now refer you to my colleague who will be able to answer your query.” “I am sorry but I have absolutely no idea who that might be/what you are talking about.”

We as people are taught that not knowing is nothing to be ashamed of as it is our thirst for knowledge that makes a difference. However, in business context this does not prove to be true. In different contexts it might signal laziness, lack of interest, lack of motivation, lower intelligence. In organizational context it signals dysfunctional communication, lack of transparency, lack of employee inclusion, miscommunication, dishonesty… the list goes on and there is not a single positive characteristic on it.

The first answer provided above indicates a company where all processes are controlled and information is shared at an appropriate level. Normally, consumers and partners trust such companies the most.

The second answer points to a company where either size, branches or business structure makes it difficult to manage everything from the headquarters. The company probably has a higher level of independency of structure or employees. However, navigating through the structure presents only a minor difficulty. Consumers and partners generally trust such companies but do get frustrated while trying to navigate through different departments in order to find the one they need.

The third answer is an example of an organizational mess. Consumers and partners generally do not trust such companies as they perceive them as unprofessional, inefficient, possibly dishonest, excluding employees from policy, lacking control over the business.

In addition, one should consider that wasting time on finding information or getting a service will deter many consumers or potential partners who do not deem the company or the service irreplaceable.

The company’s reception or service desk is the company’s face. As incredible as is it a rude receptionist could do a lot more damage than a minor marketing setback. One of the reasons is that nowadays people buy much more that products and services. They buy experiences. For them it is important to receive a positive experience in connection to a purchase. That is why being tossed around from department to department while finding the right one or being served by an impolite and resentful employee is often a deal breaker.

In B2B communication the need to make 3 or 7 phone calls in order to talk to one person means losses. Time is money indeed. Therefore it is expected that if such situation occurs business prospects in many cases will decline. Rudeness at organizational level means directly closed doors. Of course, here has to be considered the importance factor. There are those companies who one would wait as long as needed to talk to and who can allow themselves to be as rude as they like.

However, practice shows that such companies do not do well in the long run. Being thoughtful and careful with your partners and customers is one of the requirements of contemporary business. Therefore it is a must to provide a splendid customer service that will fulfill all requirements your stakeholders might have. The information paths should be clear and easy to follow and employees should be educated in the importance of serving customers with the necessary respect and care and, just as importantly, in a timely manner. Do not risk a company’s image on a “don’t know”!

DIDI

SEO and website visibility

Today I had to search for a particular book which everybody told me cannot be found. I of course did not go down the street looking for it in the local book store. I found in Australia never bothering to make sure there was no seller closer to me. Maybe they had it in a neighboring town or in Germany for example but I did not know about it. Then I started thinking about the crucial importance internet has for the success of business today. It allows for a virtually unlimited market on minimal cost. It connects a seller and a buyer. It boosts brand communities. It increases the awareness. It allows us to talk directly with our consumers and understand in a crystal clear way what they want, need or think.

Businesses use internet in many different ways – websites, blogs, commercials, social media, newsfeeds, email marketing, recommendations and references, networking, sourcing, researching, etc., in most of the cases combining them. All of these tools have as a purpose either profit by sales or profit by efficiency.

To achieve those goals though a company should make sure that it’s content is visible. In other words, when people type a search for your kind of a product or company you should pop us among the first search results. That is what guarantees you success.

If we focus on websites visibility that at first seems to be mission impossible – internet is flooded with similar products, services and companies. So you should either be truly unique or smart.

There are several tips repeated by specialists which should help you increase the visibility of your website:

1. You should make sure that enough websites and publications are linked to yours. Search engines discover content by “crawling”, a process of accessing billions of pages with interlinked content. More links equals more visibility.

2. You should optimize keywords according to expectations (even better research, for example through Google AdWords or trough testing keyword effectiveness on different search engines) about what key words consumers would use while searching for your type of a service/product. Key words repeated many times on the website give better discovery results. “Long tail” keywords will reduce general traffic but will direct those who know exactly what they want (and that they really want to have it) to your pages.

3. Give a title to each page according to its content. Be precise and short as that will ensure you better discovery by search engines. Concentrate the important content in the first three words as search engines read the first 70-75 characters of the title tag.

4. Provide quality content. As increased traffic is perceived by search engines as increased importance of the search result, it as a rule increases traffic further. You should make sure that visitors get what they want. Do not alienate readers with overwhelming selling efforts.

5. Use text links. When explaining content by referring to a different web address, use a hyperlinked text instead of typing URL strings. It is not a good idea using your keywords as links to other pages or web addresses. Be warned that too many links on a page mean that they will not all be searched.

6. Make sure that the structure of your website is accessible through linking all pages. If not, you risk that search engines will not find the not-linked pages. This will greatly lower the chances of your content being found.

7. Content which requires a login is generally skipped by search engines. If you aim for visibility, avoid that kind of barriers.

8. Get listed in as many relevant directories as possible. They exist in different shape and size and provide different options for listing. There are also paid options, however, as a consumer myself I have my doubts about those few search results that appear as first and are marked “sponsored”.

9. Use HTML coding for your main content in order for it to be visible to search engines. Java, Flash and images are still ignored by them. Check how your website is read by a search engine to ensure it will be read and listed. That you could do with a tool as SEO Software tool.

10. Research by SEOmoz shows that social features on the site and the domain are becoming increasingly important. However, it is still the link metrics on page level, the link authority features on domain level and the page level keyword usage that count the most when it comes to search engine ranking factors.

11. Search engines guidelines read that URLs should be created with appropriate and human friendly keywords.

12. Aside of key-word-rich content ensure regularly new content.

Those are just a very few ground rules as ensuring website visibility is a process that goes all the way to programming the website and to agressive marketing on the other end. However, I am sure that most of you are already lost. That is why I am going to say it as simple as possible:

What you are really supposed to do as long as you do not possess IT qualifications is to make sure that your URL is user-friendly, maximally descriptive and clear; that all relevant keywords are listed and repeated as much as possible in the relevant texts; that the website is listed in as many directories as possible; that content is readable by search engines; that meta description tags provide clear and appealing description of your content; that every page is titled accordingly and linked to the website; that there are credible external links to your site which you can ensure by negotiations and networking; that keywords match consumer search.

The rest I would leave to the IT specialists.

DIDI

Transparency and consensus on policy

On many occasions leaders have to make difficult or unpopular decisions to keep the business up and running and they are often enticed to not share the truth with their employees or partners or divert their attention in order to act undisturbed. Often the thought is to share the results of their actions in the right moment while avoiding the unpleasant debate about what should be done. Sometimes things go as far as the leader believing that they are the only qualified person, thus discussion is a sheer waste of time and nerves.

No matter what the case though, my advice is to not fall into that trap. Years ago I had the opportunity to observe exactly what happens when a leader decides to act independently and the truth is that it cost him everything.

Reasons in that particular case were lack of trust, many definitive stakeholders (Agle, Mitchell, Wood, 1997), variety of policy issues and political challenges, insufficient financing, internal fights and conflicts of interests. Many of those were caused by tough policy, lack of transparency and consensus, no discussion or stakeholder involvement. It is arguable whether many of those issues were not just inherited but there is no doubt that the policy of independent control and silence only deepened them.

The result was that a leader who did fight a good cause and tried to make a difference ended up voted out from the organization by the majority of those who he had worked with side by side in the previous 8 years.

I have to point out that I do not claim he never did anything wrong policy-wise. However, considering the context of the social and business environment, he did not do anything outrageous. He did create enemies by following dedicatedly his strategy but in doing so he achieved a lot in terms of organizational goals.

Then why did his allies vote him so rigorously out of the organization?

 First reason: No consensus on policy.

Even though the organization was meant to be lead by a management council most decisions were made by the leader alone. Many of the interests of those from the council were never taken into account which resulted in much expected outrage.

Second reason: Conflict of interests.

The social, business and political environment presented the leader with many challenges. First, it was the challenge of defending the interests of the organization and in doing so creating enemies both in the government and within the ranks of the organization itself when he would fail in negotiations. Second, unfortunately, influence meant privileges and high earnings, thus virtually everyone was trying to become a leader, regardless of the consequences for the organization and those dependent on it. As a result many managerial decisions were ruled out just in an effort to sabotage the leader.

Third reason: no regard to rules and regulations.

In order to achieve his goals the leader disregarded rules in connection to elections and power distribution. This resulted in outrage.

Fourth reason: no transparency.

Transparency is important as clarity about what is happening and why is a potent support drive. Not understanding or not knowing the reasons/goals/methods resulted in confusion, doubt and lack of support. In a more traditional organizational environment it would also lead to lack of motivation in employees.

Reflecting on this example a few things become obvious. A leader should accept that they cannot achieve their goals alone. They need support from employees, partners, allies, government and other key stakeholders. In this sense, an organizational understanding will mean understanding the need to engage key stakeholders in a productive dialogue. By that I mean that you must:

1. Understand the structure of the organization and the power distribution.

2. Understand the need to follow rules or propose changes when inefficiency is found.

3. Identify opinion leaders and make them your allies.

4. Understand the environment you do business in – institutions, regulations, competitors, partners, communities, identify important stakeholders.

5. Understand processes of decision making and analyze results from past experience. Consider process enhancement.

6. Understand the need of stakeholder management as a complete strategy.

Along this process you should realize that transparency is directly connected to stakeholder support and corporate image. You cannot upkeep a good image without reporting your activities and you cannot successfully manage an organization without achieving consensus on strategy. Therefore two more must-dos should be added to the list above and special attention should be paid to them:

7. Optimize internal and external communication channels enabling discussion, feedback and reaction to reported issues.

8. Maximize transparency.

Business today cannot really have secrets as there are too many ways for the truth to reach the public. Therefore it is advised to provide informational access to your activities. As a matter of fact transparency is becoming a currency in terms of both image building and image protection. Being honest with your stakeholders builds trust and support which result in sticking with the company even when a crisis hits (see for example the Johnson and Johnson Tylenol case). 

What concerns internal stakeholders, it is very important to keep them informed and to involve them in decision making. Transparency and consensus are probably even more important internally as the support or lack of support by your employees and partners means the success or the failure of the organization. A frustrated employee can do incredibly a lot of damage by not doing their job, affecting the motivation of their colleagues, going public or spreading the company’s secrets.

In two words, there are good reasons to work transparently, maybe consider different forms of reporting and stakeholder involvement, and to work on achieving consensus within the organization on organizational goals and policy, all the while keeping in mind stakeholder interests.

DIDI