Our tools for improving your B2B CM
The five elements of the outer ring start with SCMA KNOWLEDGE.. clearly todays B2B customer relationships rely on extremely high levels of knowledge about the customer, marketplace, consumers/shoppers and categories. Over recent years the ‘level of the bar’ in this area has risen dramatically to the point where for any customer you should as an absolute minimum know:
- Their strategy (ies)
- Their plans
- Their objectives
- Their decision making process
- Their key stakeholders
- Why they choose to buy from you?
- Their business processes”
The second part of the outer ring is SCMA STRATEGY and basically looks at how fully your strategy is SCMA to your major B2B customers. Until recently many suppliers would develop strategies with little/no reference to the strategies/needs/wants of their major customers and were then surprised when they failed to execute their strategies through/via those customers who provide the ‘route to the consumer’. A well SCMA strategy should have overt references which demonstrate the ‘fit’ or alignment with the strategies/plans/objectives of major customers and demonstrate how the strategy will be executed through/in partnership with major customers.
The third section of the outer ring is SCMA PLANNING and focuses on whether the plans of the business are SCMA to major customers. A well SCMA plan should make crystal clear exactly how and why top customers will assist in executing the plan and should be written in a format that allows it to be presented to the customer as a proposed joint business growth plan. Plans should specify mutual volume and profit growth achieved via category growth initiatives and may well detail the customers forecasted volume AND profit over the plan period. Plans need to fully take into account the strategies, plans and policies of top customers so that customers will find them easy to adopt and implement.
The fourth outer section is SCMA IMPLEMENTATION and looks at how you execute your plans with the customer. Great SCMA implementation is a carefully tailored approach to how you sell, present and negotiate based on the style/preferences of your customer. Many businesses strive for and train a ‘company way’ of commercial dealing but fail to then effectively attune their approach to the needs/wants of each major customer – hence they fail to connect effectively.
Finally we look at SCMA RESULTS – what is our SCMA approach achieving across a wide range of measures from brand equity at the highest level all the way to customer and customer service satisfaction. It is vital that businesses monitor how effective their efforts at attunement are proving ‘through the eyes of the customer’ and constantly strive to better attune their efforts. We know that higher attunement levels lead to higher long term profit levels so this feedback loop is vital to establishing company ROI.
Market – in this section we focus on how externally focussed a business is and how well it reflects the market reality in its strategies, plans and objectives. Only by being closely SCMA to the marketplace, having high levels of market information and ensuring that the information becomes embedded in everything the company does can you claim to be truly market SCMA.
Relationship – it is easy to think that ‘relationship’ in the traditional sense has been stripped out of major B2B commercial dealings – we refute this belief. In fact the difference today is that the relationship is now a multi-faceted and living thing which evolves as a result of numerous contact points between the two businesses. As we will see later, the overall relationship should develop mutual respect and high trust levels over time – but this has to be earned. Our BIG MESSAGE in the relationship area is that RELATIONSHIPS WITH MAJOR B2B customers have to be MANAGED. We often see even large and well managed suppliers which fail to actively manage important relationships – they simply think that if they act professionally the relationship will look after itself… IT WILL NOT. Suppliers should have well thought out relationship strategies and plans and should constantly monitor their success in engineering the relationship they desire with top customers. Where relationships are not in a satisfactory place there should be a concerted top [boardroom] to bottom [ KAM/customer service/logistics ] plan executed to put things right as a matter of urgency.
Organisation – here we look at how the business is structured, organised and trained to be SCMA. For example we consider whether your organisation structure/resources are constructed in response to the needs of major customers and whether you have cross-functional customer teams in place which can action comprehensive [ top to bottom ] contact plans effectively. We consider the skills/attitudes and behaviours of your people as they relate to meeting or surpassing customers’ expectations.
TRUST – is about moving the relationship with the customer to a place where both parties feel sufficiently confident to take risks, share objectives and plans and work jointly in an atmosphere of mutual respect. The customer respects the supplier and their products and sees them as genuine experts in their field whilst the supplier respects the customer as an expert in reaching the end consumer effectively.
INTERDEPENDENCE – is closely linked to trust but moves the relationship to a place where the two organisations rely on each other. Interdependence may be reflected in the sharing of data and its analysis to extract insights, in sharing physical resources or in formal arrangements like category management or vendor managed inventory. As interdependence develops, the boundaries between the two organisations start to blur and you will find more and more joint /team working between supplier and customer.
EQUITY – B2B relationships which are well SCMA, in which there is genuine trust and interdependence should by definition result in equitable outcomes. As both the supplier and customer are working to SHARED growth objectives and are contributing to the effort there should be mutual interest in finding equitable solutions to the business challenges faced. Equity might be reflected in the amount of resource being contributed to category growth efforts or co-funding of marketing activity for example. The key is that both parties are happy that the effort being applied and the outcomes in terms of growth or profit are fair and equitable.
For a full explanation of the model click on each section of the interactive model for a full description.