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

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

Telemarketing

We all know that there is nothing more annoying than telemarketing. And the reasons for that are many – telemarketers are intrusive, persistent, and almost never give up on selling us something we do not need at all. However, in Denmark right now there is a real boom of telemarketing. I would suppose that it is the crisis to blame. Or maybe the fact that the relative stability of the economy has made companies believe that marketing is not necessary and now when it actually is necessary companies make the biggest mistake – go for the quick kill, find customers right now and sell to them in that minute. Kind of shortsighted, is it not?

But I guess it is a valid point that you do it because it is your last recourse. I do agree that an unknown company needs to reach out – first to survive and then, if things go well, to grow. Telemarketing though presents more of a danger than a survival tool and its popularity only points to lack of market experience. It is dangerous because in many cases it damages the image of the company. Nobody wants to become a customer of an annoying company intruding their lives as nobody can predict how annoying that company might become in the future. It is a question of image, trust, and expectations.

When it comes to B2B telemarketing, the situation is slightly different. There, if done according to careful planning and in accordance with a strategy, telemarketing can create awareness and relations and boost the business. However, unfortunately this is rarely the case. If done correctly, telemarketing will not be called telemarketing. It will be just a part of a stakeholder management strategy. If done wrong, you risk once again your company’s standing, your network and your prospective customers or partners.

I would not at all comment on end-consumer-focused telemarketing as I find it not suitable for any decent company. It is indeed not in accordance with any set of business ethics rules. If we concentrate on the B2B telemarketing, my comment would be that it is something you do on your own risk and it will most likely do more damage than good to your company but at least from an ethical point of view you are in your full right to do so.

Let’s assume you are not convinced that telemarketing is a bad idea. Here I will present to you a list of the most common mistakes that will ensure you a ruined company image. Avoiding them does not guarantee you success as telemarketing is much about personal skills and abilities and grasping the situation as it comes and develops. But it might help you minimize the damage you otherwise will cause. Remember: no matter what branch you are in there is only a limited number of potential partners/consumers. Do not waist opportunities!

Most common mistakes with telemarketing:
1. Inability to speak short and precise;

2. Inability to present a valid reason for contacting the other side;

3. Inability to comprehensively (in short!) present the main features of your product/service;

4. Inability to present a unique feature/competence as grounds for the customer to choose you;

5. Inability to engage the other side;

6. Inability to answer all questions with confidence;

7. Inability to listen and understand the position/need of the consumer;

8. Inability to provide a flexible product/service fitting the consumer’s needs;

9. Inability to take a no and finish the conversation in a positive manner leaving open doors;

10. Inability to demonstrate knowledge and interest in the business of the other side and present an offer that is tailored specially for that consumer/partner in that very moment;

11. Inability to innovate and develop the product/service in time;

12. Inability to see one’s mistakes and adjust the strategy due to lack of strategic insight and control.

Once again, my advice is just to not do it at all or to do it only in very serious situations where the company is facing bankruptcy if no customers are found that very minute. If you, though, have made up your mind and do not see other solutions to your business dilemma, then try to plan the whole process very carefully.

First, you need to decide on a product/service/market niche and make a list of possible contacts. Research them thoroughly including financial data, market segments, image, vision, mission, network, recent activity, planned activity. Try to prioritize and make the list again including only those companies which you mean are suitable for your goals.

Then you should consider the different ways you may contact those companies – you can call, send an e-mail, regular mail, visit. You could always research your network and try to find referents who can help you to come in contact with those you need to reach.

If you are not sure what is the best way to present your company or service/product, that is, if you never before had done something similar and you have never received feedback on it, it is recommended to make a trial. Choose a few companies from the list who are of least priority and try out a few different methods of contact. It is a good idea to use the same method on at least 4-5 companies to be able to make some sort of a reliable conclusion. If you though operate in a sector with not so many prospective customers/partners you might want to consider additional advisory before doing anything as every company contacted in a wrong way is a loss for you.

Last but not least, you have to consider implementing effectiveness control. Without it you risk to lose track of what is happening and end up with no results at all. You are advised to undertake a small-scale bench marketing to estimate average success rate for the branch. Then you can use it to evaluate your own results. Results that do not meet the average success rate mean that your strategy is not working and revision is necessary. No matter how many times you change strategy, remember to always implement result control.

My advice is, however, do not do telemarketing. Working on a proper stakeholder management strategy will not take much more effort but it will guarantee you long term results and image enhancement. Saving the business today is not a long-term plan and if you want also to have your business up and running tomorrow you will need a bit more than just a momentary financial injection.

It is simple – think strategically!

 

DIDI