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Want To Become A Supplier To A Big Company? Consider This First

A giant customer can be highly profitable or cost you your business. Have you considered all the angles?

Ed Hatton

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customer-service

“How do I get into the big corporates or Government?” Business owners visualise huge sales and profits by becoming a supplier to a giant, and that is often the case. For a big organisation with billions to spend, a trivial expenditure to them may be a large fortune to you. Do not let the number of zeros dazzle you, riches are not guaranteed; many entrepreneurs have suffered losses or businesses collapse from such dealings.

You must understand the motivations of managers of large organisations, and the risks they face. They are KPI-driven and risk serious damage to their careers if something goes badly wrong. Compared to these issues, your profitability, work hours and ego are minor considerations. You may believe that you only have to perform in terms of your agreement, but in reality, you need to make your contacts look good. Aim for a zero fail rate; deliveries that are late, faulty or incorrect may cause a disproportionate explosion because that means your contact has let someone down. If you are smart, you can help your contacts get a reputation for superior internal service.

Related: How To Stay One Step Ahead In The Knowledge Era

Understand the risks that big customers pose to your business

There are risks in any unequal buyer/seller relationship. The biggest risk is if the giant stops buying. Large customers can be extremely demanding; they see you as an extension of their business and can be intolerant of your need to service other customers. Many small suppliers will be familiar with a peremptory summons to an immediate meeting and occasional rudeness. A supply contract inevitably favours the big guy, and this means pricing and other terms of trade are vital. You must protect your ability to make a reasonable margin even if circumstances like inflation, exchange rates or sector wage agreements change.  

Large organisations care about meeting their budgets, not about your profitability, and many suppliers have failed because they were bound to supply goods at an unsustainable price. Managers move around, and if your champion is promoted, the replacement manager may prefer their favourite suppliers, so out you go. Broaden your range of contacts in the organisation to avoid this risk.  Large organisations are huge bureaucracies; decisions may take time and payments may be delayed, especially if your paperwork is not perfect.

There are opportunities — but evaluate them carefully

The major opportunity is significant growth. They will buy if you supply a product or service that suits their needs and budget at service levels that make the managers look good. It is entirely possible to make your company almost indispensable by solving problems and offering them innovative new ways of exceeding their KPIs at reduced cost. There are opportunities to supply other parts of the giant, as well as their supply chains. Be careful with growth. Your primary contact will be used to your full attention and if he or she senses that this is no longer happening because you have grown, they can seek alternative suppliers. Never let growth reduce your customer service level.

A very large and prestigious customer gives your company credibility, allows you to attract the brightest staff, makes selling to other giants easier and gives you funds to develop new markets and new products.

Related: Are You Forgetting To Think About Your Business Strategy?

Is it worth it?

Is it worth the big money? Yes, if you can manage the risks, chief of which is becoming too dependent on one customer. However, dealing with the big gorillas is not the same as having a more balanced supplier/buyer relationship. It works if you use your ability to be nimble and flexible to solve their problems. It helps if you are innovative and can use your creativity to respond rapidly in ways that big corporations cannot. It works if you can give very personal service, even if that means you, the owner, are the primary interface. By doing these things you can become an indispensable cog in a huge machine.


REMEMBER THIS

You need a champion in your client’s organisation, but ensure you have other contacts too. What happens if they leave or are promoted? Is your contract safe?

Ed Hatton is the owner of The Marketing Director and has consulted to and mentored SMBs in strategy, marketing and sales for almost 20 years. He co-authored an entrepreneurship textbook and is passionate about helping entrepreneurs to succeed.

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Techniques

Accurately Predict Future Sales With These Two Things

Being able to predict your sales for next month and those to come, is a result of a combination of two things.

Andrew Aitken

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sales-forecasting

As someone responsible for sales in a growing business, you would love to be able to predict your sales accurately, month after month – but this can be a difficult process. Fortunately, it’s not impossible. With some initial effort and careful monitoring, you can predict whether the team will have positive sales results in the future, and where you can see trouble looming, you can take advance action to avoid problems.

Being able to predict your sales for next month and those to come, is a result of a combination of two things:

1. Developing a sales process

As ‘boring” as it might sound for many entrepreneurs, it is extremely useful to understand the benefits of working to a process in business. This applies to any part of the business, and perhaps somewhat surprisingly, is very applicable to sales.

Related: How To Find The Right Salespeople: And Attract Them To Your Business

Think about it this way:

  • If you do the same task a different way every time, you can expect a different outcome every time. It becomes difficult to predict whether the outcome will be good or bad.
  • But if you do the same task the same way every time, the outcome becomes very predictable, and you’ve laid a platform for systematic improvement. By making one small tweak to how you do the task, you can see if you get a better, or a worse, outcome. You can then keep all the tweaks that improve your outcome and drop the tweaks that make it worse.

2. Developing sales systems

A superior quality sales management capability necessitates that you have a Sales System on a best of breed technology platform, to help manage the sales function in the business.

A good sales system helps you capture your sales process. Good sales management practices drive home the discipline needed to implement the sales process, and in turn, predict sales results.

Take the first step in your journey towards accurately predicting sales by developing a sound sales process.

Next in this series: HOW TO DEVELOP A SALES PROCESS THAT WORKS LIKE A CHARM

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Company Posts

Why Customers Don’t Respond To Disruption

You’ve got chatbots running your customer service, interactive screens across your stores and you’ve just appointed a chief digital officer. Why aren’t you seeing sales going through the roof?

PwC

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PwC partner Quinton Pienaar says there could be many reasons for this. But the short answer is probably that in your understandable rush to stay relevant and keep up with the latest technology trends and developments, you lost sight of your number one priority. You’re just not that into your customers – and they know it.

It’s fairly easy to get dazzled by the array of technologies out there. But the trap that you’ve got to guard against is that you start seeing the world through a technology lens, rather than a customer one. Remember, technology is a tool, not an outcome. It’s the means to the end, not the end itself.

That’s not to say you shouldn’t be transforming your business digitally. You absolutely should. But there’s a big difference between investing in technology to keep up with the Joneses, and investing in technology that’s going to drive specific business outcomes and improve the customer experience.

Related: Reimagine The Use Of Technology

In fact, it would be downright dangerous to ignore the game-changing benefits that the current wave of emerging technologies brings to the table. To understand what they can do for your business, you have to know what they are. We at PwC talk about the ‘essential eight’:

  • The Internet of Things (IoT) and Artificial Intelligence (AI) are the building blocks for the next generation of digital work.
  • Robotics, drones, and 3-D printing are all about machines that extend the reach of computing power into the material world.
  • Augmented reality (AR) and virtual reality (VR) merge the physical and digital realms, and offer incredible advances in customer experience.
  • Blockchain rethinks our approach to commercial transactions by allowing participants to exchange value, and verify ownership of something, without a third party.

Some of these technologies are verging on science fiction. So how do we use them in a way that supports customer obsession? The starting point of any successful customer transformation is a customer-focused design that brings together three essential elements – business strategy, customer experience and technology – into a coherent, fully-fledged digital strategy.

In other words, today’s most successful companies have a strategy that is focused around a simple and regularly-updated list of priorities. They incorporate the new generation of technologies like IoT, blockchain and AI. But they keep their people, and their customers at the core of their business by designing strategies that directly address customers’ underlying needs and desired outcomes.

Related: Why Your Latest Tech Investment Might Not Be Wowing Your Customers

This sounds dead obvious. But what we find is that many companies we talk to are focused on growing their revenues, or making improvements to their products and services, rather than creating better customer experiences. Or they have the strategy, but are battling to execute it effectively.

Of course, to underpin this customer transformation journey, you’re going to need some data and the foundational technologies on which today’s innovations depend – data mining and analytics, mobile, and cloud. You may also need to rethink your processes to manage, enrich and maintain data, and operationalise it throughout your business.

So you have all of that in place? Good. Now stop. Breathe. Ask yourself whether your technology and data are truly supporting an unwavering focus on the customer. Because if you take one message from this article, let it be this: in today’s marketplace, putting your customer at the centre of your business is imperative to driving growth and profitability, winning market share and unlocking the value of your technology investments.

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Techniques

How To Seal The Deal By Understanding The 3 Phases Of The Customer Buying Cycle

If you want to close more sales, you need to understand the three phases of the customer buying cycle.

Pieter Scholtz

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closing-a-sale

A common misconception is that business transactions are simple affairs: Customers express interest in something, they buy, and then they leave. This is a vast oversimplification of what is at work.

Business majors and entrepreneurs have spent decades plotting out and exploiting every step of a customer’s buying process to better attract and retain clients. There are three sequential steps that customers take when they show an interest in purchasing something. Each phase reflects a different stage of their mentality, meaning that the ideal strategy to exploit each phase will differ.

These three phases are awareness, interest, and purchase. Awareness is the phase where they first become aware of the product or service that you are offering. Interest reflects the period where they show that they might want to buy your product — a customer that enquires about specific details relating to what you sell would be a good example. Targeted sales pitches are usually made in this phase. Lastly, purchase is the period where they make their final evaluation and the decision to purchase from you.

Understanding how to address the needs of each phase will go a long way towards boosting your sales and securing long-term business from your customers.

1. Awareness

This is the incipient phase of a customer’s awareness of who you are and what you are all about. This phase of the customer buying cycle is where customers make their first assessment of you. This phase is important because it’s where you can craft your message to appeal to the desired market segment.

Related: What Really Drives Sales Growth And Repeat Business?

Another important tool that is commonly used during this phase is Search Engine Optimisation (SEO). This refers to the practice of tailoring your website to the demographic that you wish to target.

Businesses will commonly insert relevant keywords into their indexed pages with the intention of leading searching customers to their website.

2. Interest

This phase of the customer buying cycle is when customers express interest in buying from you. The awareness phase is where you grab their attention, and this phase is where you have a chance to build upon it. Customers are typically non-committal during this phase; they are usually conducting additional research and/or shopping around.

Targeting buyers during this phase means that you need to give your potential customer a compelling reason to purchase from you instead of your competitors.

The responsibility here is two-fold: First, you need to market yourself as the solution to the customer’s unique problem. Second, you need to address the customer’s needs and perspectives. Businesses will frequently offer positive reviews and testimonials of their products to convince these potential customers that they offer the solution to their needs. Offering a persuasive sales pitch is only half of the solution: Make sure that the customer feels that you are concerned with what they want.

3. Purchase

This phase of the customer buying cycle includes not only the actual purchase of the product or service itself, but also the final evaluation. During this phase they might still be reviewing their options, however, the difference is that they have shown a distinct desire to purchase the product or service in question.

Related: 3 Strategies For Closing Sales Without Picking Up The Phone

This gives you an opportunity to give the customer a more comprehensive overview of what it is that they wish to purchase, and it is also the appropriate time to upsell additional products or features.

Car dealerships are especially fond of this point in the cycle. Once the customer sits down and begins negotiating the price of their future vehicle, the sales team moves in and does everything they can to get that person to buy the car. Whether they slash the price, throw in extra bonuses or offer them rebates, they will do whatever it takes to turn that expressed interest into an actual sale. This is where you want the sales team to take over: The amount of persuasiveness and personal magnetism they exhibit is every bit as important as their receptiveness and concern for the customer’s needs.

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