Imagine this situation:
Your biggest customer, on whom you depend heavily for sales and profit announce that they are going to review all their suppliers for the products and services you sell to them. However, you aren’t too worried as you are the biggest supplier, you have strong relationships and the last time they completed a supplier satisfaction rating, you were 20% ahead of your nearest rival. The competitors have all got issues, some have new management in place and the products and services some of them offer haven’t really kept up with changes in the market. The review is a seven-week process, so there’s hardly time for the competition to mount a serious challenge and in fact if anything you should probably gain more business rather than lose any.
Seven weeks later, it’s all gone wrong and you have a smaller share of the business, your standing and relationships are undermined and the future for you and your business is looking less secure. How did it happen?
I usually steer clear of politics in my blogs, but I’m sure you’ve seen a not too subtle reference to this morning’s election result. Many observers and voters will be surprised by the outcome of the General Election, but while we wait for order to emerge from the chaos, here are some thoughts from me on the lessons we can apply to our businesses.
• Retain goodwill – take care with new ideas that might make your core supporters feel threatened
• Don’t be complacent – it’s dangerous to take the customer for granted and/or underestimate the competition. If the customer invites all competitor managing directors to a meeting, don’t send your sales director.
• If you make a promise, be sure you can deliver on it – If you promise ‘strong and stable’ you can’t do anything that could look ‘weak and wobbly’.
• If there are new people involved in the decision-making process, try to understand them, what their role is and how to appeal to them
• Use your team – bring all the varied talents of your team to bear, different members of your team will appeal to different members of the customer’s team
• There is a role for optimism and personality, even in a serious business situation
As 2016 draws to a close, reviews of the calendar year are everywhere, and rarely can there have been such a wealth of stories to draw from. Whether it’s the sad deaths of many famous people, wars, or politics it seems to have been a 12 months packed with big news. I was one of 13,000 delighted sports fans who attended the BBC Sports Personality of the Year event on Sunday evening in Birmingham and again there were so many notable team and individual performances, it was hard to cram it all in.
From a marketing perspective, I have picked two stories from 2016 which stood out for me.
If you don’t follow the marketing press and/or aren’t working for a leading FMCG brand owner, you may have missed the emergence of zero-based budgeting or ZBB as it is becoming known in those circles. Businesses such as Diageo, Unilever, Kraft Heinz and Coca-Cola are amongst those who have adopted this approach to their marketing planning.
I don’t want to appear smug, but it’s a philosophy which we have been recommending to clients since Aardvark began back in 2005 – every marketing expense should be justified for the next financial year on the basis of the expected return. The marketing plan shouldn’t start with “what we did last year” and then adjust up or down, it should start with zeros in the budget, a set of objectives and a strategy. Of course, what we learned in previous years (assuming we are measuring our marketing) will help select and refine the activities we choose to invest in, but for me, it’s important to challenge the easy assumption that we’ll do roughly the same as we did last year. It fits very well with the old saying “if you do what you’ve always done, you’ll get what you’ve always got (at best).”
The other story relates to the voting shocks of 2016 – Brexit, Trump, Ed Balls and of course Boaty McBoatface. Is this a wave of anti-establishment rebellion, or could it just be that the establishment didn’t really understand its customers? As marketers, we should never be surprised by the decisions our customers make – if we are then we have a gap in our understanding and that will make it harder for us to succeed. Whether we’re trying to get people to vote for us or buy our goods and services, if we keep failing to understand what makes them tick we’ll probably get an unintended and disappointing result.
So as you look forward to 2017, my advice is to keep working to understand your customers and prospects and challenge everything in your marketing plan – does it really deserve to be there?
I hope you have a very merry Christmas and a prosperous New Year.