Do you really want a big corporate customer?

I was talking to a colleague the other day who owns a small business that has a number of small customers and one very large corporate customer. By far and away the worst payer, most demanding and least sensible customer is the huge corporate, which in reality is contributing nothing to the business except cost and hassle.

This is an area that I have been pulled into many times in the past and in every case bar one, when analyzed properly and in detail the only sensible conclusion is to ‘fire’ the big corporate customer.

In theory having a huge global customer sounds like a great idea. Big orders, little or no risk and so on – the fast track to that Ferrari you’ve always dreamed of.

Sadly it is very often the opposite.

Let me share an experience I had a number of years ago in 2010. A company I was working with ran a seminar with a well known global bank. The bank had agreed to allow its procurement team to tell us the truth about supplying the bank. I am not allowed to name the bank publicly and you’ll see why in a minute.

To a room full of excited and enthusiastic potential suppliers, the procurement team laid out how the bank buys and its tactics for getting the best deal:

• Payment terms were 180 days – non negotiable.
• Contracts could be stopped instantly by the bank, but only on the agreed notice by the supplier – usually 90 days or more.
• Procurement would never stop screwing the price paid down or improving on the terms of service required of the supplier until it was convinced it had just about got the supplier to back out.
• Buying cycles were measured in months if not years on average.
• If a supplier could not supply globally it would not be eligible to supply locally.
• As a business, the bank considered that if suppliers barely broke even on supplying the bank that was okay, because just having the bank as a customer would win them other customers.

It doesn’t take much imagination to picture the reaction in the room from all those enthusiastic and eager potential suppliers. Most of them were shocked and many of them angry that a big player would consider treating smaller companies so badly.

However, think on this. That particular bank had a procurement budget of more than $10 billion annually so its buyers were probably quite rightly focused on big solutions from big companies that would ensure that they had fewer contracts and were able to lever economy of scale in ways that buying from smaller companies just would not permit.

The harsh and unforgiving reality is that it is usually a costly hassle for big corporate business to deal with smaller suppliers and often that is why they shy away from it.

It doesn’t mean you should ignore them, but does mean you need to be very clear in your mind what it is that you want from dealing with them. You need to have a plan and the sense to walk away if the deal isn’t right, because make no mistake, if you don’t then you could finish up with a great business being held back by its biggest customer.

Author – Tim Sandford

Content Management or throwing crap at the wall to see if any of it sticks?

Content or just crap?

When I was a small boy, my grandmother used to recite a phrase to us, when any of her excitable grandchildren were talking too much or spinning a tall tale as small children do. She used to say, “if you have nothing useful to say, its better to say nothing.”

Wise words that in my view and something that the content management world might like to consider.

I’ve spent the last few months deliberately subscribing to newsletters from a broad range of business to business vendors that are using a content management approach to generate awareness, interest and sales leads.

The one thing that stands out a mile is quality. It may just be me, but it feels to me that an awful lot of the companies I have subscribed to are generating a vast amount of content of which very little has either any depth or quality. It honestly feels, to paraphrase an old saying that they are just chucking as much crap as they can at the wall and hoping that some of it sticks.

On the basis that content marketing is all about demonstrating expertise among other things in order to be seen as a credible provider of a product or solution, then isn’t it wiser to assume that quality is more valuable than quantity.

To illustrate what I mean, of the 25 companies I subscribed to:

• 60% send out something at least 3 times a week and often more.
• 24% send out something at least once a week.
• The remainder only send out something when they have something of value to say 

The interesting thing, for me at least, is that the companies that are bombarding me several times a week with papers, opinions, blogs and other forms of communication are the ones I will be unsubscribing from now that I have published this blog article. The primary reason being that even with a big team of content experts, not even the busiest companies in the world will have that much to say without reducing quality in favour of volume. As a result an awful lot of what they are sending me is just rubbish without any clear purpose other than to fill up my inbox.

On the other hand the small group of companies that only communicate when they have something of value to say, are the ones I will continue to subscribe to because when they communicate with me, it is of value and relevant to me.

For me it all goes back to that point my grandmother made, but perhaps put in a more positive way – When you have something useful and valuable to communicate to your customers, make sure you do, but don’t waste their time when you don’t.

As always folks it would be great to hear your thoughts on this blog and any experiences you  think are relevant.

Milliband vs the Big 6

So its on! Mr Milliband has declared a challenge for the utilities pricing belt on behalf of the consumer (voter really) – Kid Customer (Mr Milliband) versus King Shareholder (The Big 6 Utilities) - the current, undisputed champion of the utility company boardrooms.

I am perhaps doing a bit of a Hollywood on this, but it is a timely reminder that virtually none of those big public companies have ever really been driven to deliver value to paying customers. Instead they are driven by shareholders who would probably be gleeful to see us all pay twice as much as we already do, so long as it returned them a better dividend.

If you read my blog regularly you’ll know that in my view the boardroom domination by shareholder value has left customers out in the cold and very definitely second class. To give you an example, I used using figures derived from the BBC to calculate that in 2012 the big 6 energy companies generated more than £150 profit for every household in the UK. A little down on 2011, but almost twice as much profit as the two years before. That’s a lot of profit especially in very difficult economic circumstances.

So, do you care a jot what the shareholders get now that you know how much profit they make from you? Or would you rather your utility bills were cheaper?

Thought so. 

What if I suggested that if the 'Big 6' delivered more value to customers, they would very possibly also be able to pay a bigger dividend to their customers?

Apple, the most valuable (regularly) company by market capitalization in the world is also one of the best customer service companies in the world. It focuses heavily on customer value and delivering the best possible customer experience it can. Guess what? It is such a good experience the consumer is often prepared to pay more because it’s a superior product. Its not just Apple either, Rackspace the cloud hosting provider is another similar company leading its market by focusing on delivering excellence to its customers. Again it is not the cheapest, but it is regarded by the market as probably the best there is.

So here is the real point of this little blog. Both Apple and Rackspace are more valuable because they deliver more to customers. As a result both customers and shareholders win.

It’s really obvious isn’t it when you think about it. Delight your customers and they help you attract more customers. This is essentially the old fashioned basis on which businesses grew – they did a good job for their customers, knowing that it would help them get new customers.

So here is a simple little idea for the folk at the ‘Big 6’ if you don’t want to face the challenge from ‘Kid Customer’ in 2015 why not start really thinking about the people that pay your bills, they are at least as important as your shareholders. What's more if you look after your customers you'll probably be able to pay your shareholders a bigger dividend.

Fastest, Cheapest, Brilliantest - or perhaps a little honesty might be better?

Being a bit of an obsessive marketing geek, I spend a lot of time looking at the way companies present themselves to the market and promote their products and services.

One of the things I’ve noticed in the last few years is the rise and rise of the super superlative in every field of marketing serving every marketplace. You know the kind I mean if you think about it:

•   Eat one of these pills and lose half your body weight.
•   Our Internet service is so fast it delivers content before you even knew you wanted it.
•   Our service is so wonderful a Celebrity endorsed it

You would honestly have to live in a cave with no access to any form of media not to have noticed this. But the big question is why do companies feel the need to promise things they can’t realistically deliver on.

Not sure what I mean, well think about these few examples:

• Mobile telecoms companies in the UK are absolutely adamant that they cover 99% of the population, yet spend five minutes looking at the comments about coverage on social media and you would think the reality is exactly the opposite?
• Utilities claiming that their deals will save you money if you just sign up to one of their 'simple' tariffs that trap consumers into complex and often very expansive contracts – not sure if I am right about that, well why is OFGEN spending so much time investigating it.
•  Lets not even go near the financial services sector with PPI, mortgage miss selling and many, many other examples of big promise, no delivery. 

A very brief and not terribly exact piece of research I carried out with about 30 random contacts showed that around two thirds of those I spoke to pretty much know that the increasingly outlandish promises being made by big businesses don’t amount to a hill of beans (whatever that means) but they still buy from these big players.

So here is a question for you. Does this world of super superlative but mostly empty corporate marketing promises present an opportunity for the rest of us?

Remember Roy Brooks the Honest Estate Agent from the 1960s who made it big by being almost ruthlessly honest about properties he was selling?  What about AG Barr the Scottish soft drinks manufacturer that never uses anything other than humour to market its drinks?

In both cases taking a different approach has paid dividends time and time again, while everyone else is still playing the same old game.

In neither case do they make outlandish claims (except humorously) or over promise on something they can’t deliver. As a result we trust them.

Anyone that has read the book or done any work with me knows that in a connected market feedback – good or bad – is often instantaneous and entirely public through social media, not to mention costly for some companies reputations. So isn’t it maybe a better idea to just set expectations properly and then deliver on them, rather than trying to promise the earth and then deliver a small egg cup of sand?

I’ll leave it to you to work that one out for yourself in the context of your own business but it would be great to hear other’s views on this.

Author – Tim Sandford

You're Not a Marketing Guru?

This article has been bouncing around in my head for a little while. Mostly because I haven’t found time to tell you about the meeting I went to where my client was surprised when I said, "No, I am not a marketing guru."

I have been working in sales and marketing for more than 20 years and enjoyed considerable success in my work as a marketer, but I do not claim to be an expert or guru - I'm still learning new things every day. Then again, how could anyone credibly claim to be an expert when you take a look at the diagram below?

The marketing communications channels shown in the diagram do not represent a complete picture by any manner of means – if I had put everything down, the diagram would have become so complex that it would have been almost impossible to understand.

In the old days, Marketing was much more straightforward with only a few ways to communicate with the market. Now we count more than 60 ways to engage with your market and thousands of individual branded variations in the mix. 

So the question is, how do you get your message in front of your target decision makers and noticed? 

This is where a lot of CEOs, accountants and technicians from medical types to IT entrepreneurs that I’ve met over the years haven’t quite realized yet that it is no longer just about a bit of PR and advertising with a bit of social media chucked in on the side. Its much more complex these days.

In today’s fast moving, connected marketplace, the sheer number of channels available makes it almost impossible to be an expert in all of them, especially some of the more arcane ones.

Setting aside things like the message, its quality, its focus  and so forth, these days our experience shows that a key part of success lies in identifying which of the many communications channels is relevant to your market.

For example, there is absolutely no point in investing a fortune in marketing on Facebook if your target market doesn’t use Facebook as a way of finding out about the kind of products and services you sell. That would be a bit like trying to sell premium beef burgers to vegetarians.

This is something we recommend strongly that you do as part of the development of your relationship with you market - not the selling beef burgers bit. We mean finding out how your target decision makers look for information on the kind of products you sell and concentrate on those channels because they are where you are most likely to get the best return for your marketing buck.

If you do, take the time to do this, experience shows that you increase the chance of your campaigns being successful and generating the demand your business needs - at least a 50 better chance in our experience. 

As for the client I mentioned at the beginning? Well their team is doing well communicating across just 4 channels and generating a much greater volume of enquiries than they had been before using more than 10 channels.

As always we're happy to answer any questions you might have and it would be great to hear your views.

Author - Tim Sandford

(Bye the bye. I'm working with the design guys to publish the full channels diagram, if you'd like a copy get in touch and we'll send you one when its published in a couple of weeks)