1 August 2013

Find next major customers early enough

When I was selling mobile phone systems in 1988, working with a major player in the business, I received on my desk a request from then Czechoslovak Socialist State-owned telecoms provider, SPT Telecom. It called an indicative offer of  NMT exchanges, base stations, and a bundle of services. Details of the tender were limited, and no means to ask for further information were provided. Only the address and time, where and when the offer was supposed to be delivered.

Although the signs to make a deal were very poor, we decided to make an offer. As requested by the customer, it meant three binders in five copies - two large suitcases full of paper. I flew to Prague to deliver the offer, with the aim to try to meet the senders of the invitation to tender, to clarify their plans and to create for us a good position for the following steps. At SPT I was welcomed by a guy that looked like an accountant. He took the papers, but was unable and unwilling to discuss anything about the project and could not arrange meetings with the ones with more knowledge. I was sure that this will not work.

Fast forward to 1991. After some vivid years Czechoslovakia is now liberated from socialism, SPT Telecom is privatised, it has established a cellular joint venture Eurotel with American operators - and we have won the Eurotel contract to supply the country's first NMT network. In that autumn Eurotel's core team comes to Finland via Stockholm. The ferry trip to Helsinki will be used to celebrate cooperation, besides ordinary business meetings. At night, I sit on board along with two of Eurotel's senior directors, who have been involved for a long time, and I hear from them a warming tribute: In 1988, we were the only company that answered their call for tender, the resulting information helped them greatly forward, and then established relationship was significantly affecting the selection of the supplier.

The story above is a great proof of how vital it is to start building customer relations already today, though they probably will not bear fruit until tomorrow. Here we shall dig this deeper. The focus is not to predict future client needs but measures to utilise changes in customer business circumstances, with the aim to open our products and services for new opportunities. The ideas are more applicable to ​​corporate customers, in the consumer side of the approach is slightly different.

Changes in customer circumstances

How to track these changes ?

As noted above, changes in the macro-level operating environment create big opportunities to transform a hesitant would-be customer into buying one or to increase their sales volume significantly. These changes are already under way rapidly, for example in the BRIC countries, and many new countries, e.g. in Africa or Burma and Cuba, are worth following.

Another country or regional level change opportunity relates to new or heavily increasing investments in certain geographical areas or domains. Wide interest in food, water and energy supply, or projects planned in the arctic regions are examples of this.

On individual company level, planned changes in the ownership structure are a sign that there might appear demand for new products and services. Ownership arrangements may generate resources and willingness to implement plans, which were previously beyond means. Investments can also be directed in adjacent sectors or new geographical areas.

Planned changes in company's business model anticipate new opportunities for sellers. New needs and customer segments to be served, re-shaped offerings, sales channel and customer relationship strategy changes, renewed revenue model, etc. are all signalling change in a way of working, thus potentially implying new or broader supplier relationships.

Facing significant external influences, such as globalisation, digitalisation and growing social media influence on customers' purchasing decisions, may suddenly change company's competitive horizon. To meet this challenge typically requires new solutions and new partnerships.

For most of the products and services, startups are very insignificant, or at least high risk customers - you never know, whether an emerging business will continue to exist, if any growth is to be expected or if a company is capable of paying their bills. On the other hand, if a startup survives and is able to grow, it needs for further expansion same products and services that also established companies use. And even bigger growth will be seen in subcontracting and services related to startup´s business domain, as well as in complementary and supporting products and services. By creating contacts and business relationships with these companies at an early stage, there will be an option to benefit from potentially astonishing growth.

Preparing for changes

The good news is that you can also be prepared for these changes.

With existing customers, the company must first define possible and relevant change options in the horizon, prioritise them and then select the customers that the main changes would mostly impact. On customer level impact of changes need to be taken into account in the customer-specific action plans and in their implementation. This is best done by modifying attractiveness assessment of the customer that is part of the overall plan. Future potential is explicitly taken into account in the assessment of challenges facing customers in the future, their probability, and thus possibly resulting additional sales. In this way, also currently low-valued customers get enough attention and a company positions itself well for future growth.

In case of new customers, a company needs to be prepared for possible changes also when selecting new target countries or regions, prioritising new focus customers and when evaluating willingness to establish a beachhead in companies, whose potential is small at the moment but in the future may be significant.

1 comment:

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