Implementing a Successful Strategy Requires Building a Closer Relationship with your Customers
(and their Customers, and their Customers’ Customers…)
Today customers have more choice and they demand products/services that meet their exact need –high quality and performance or a completely customized solution.
You can define your Customer Value Proposition how you like, but from the point of view of your Customer, this is how the various offers on the market look.
Where do you compete?
European businesses find their competitive advantage in Premium Offer and Custom-Made Solutions
Companies from the recently emerged countries have a competitive advantage on price, at a quality that is up to global standards. Companies in “traditionally rich” countries have to distinguish themselves through a Premium Offer – the best quality, performance, reputation – or on using their expertise and networks to offer Custom-Made Solutions. They are challenged to re-think their old “make and sell” business model. Their old vertical structures and linear processes do not support the new customer value propositions. These require completely different management.
Don’t get caught In-Between
To be caught “In-Between” means eroding competitiveness and shrinking margins. This is what happens if you do not work to differentiate your offer as mentioned above. The best companies constantly innovate to stay out of this zone. The shift in strategy is logical, but getting the organization and people to implement it is very difficult.
Customer-Focused Organizations: The CEO or General Manager is also the Chief Customer Officer
“Marketing is not the art of finding ways to dispose of what you make, it is the art of creating genuine customer value.”
The product push approach – making a product and then marketing it aggressively - has been getting diminishing returns for years. Today’s successful organizations have figured out what the customer really needs and how to deliver it better than anyone else.
Focus on the Customer, not Internal Functions
Traditional companies are organized in functions. Customer focus requires organizing people around the customer’s needs, regardless of function. Systems and processes are different – driven by customer –centric metrics and customer insights. The company works in agile customer-facing units. They are supported by back –office teams who develop complex solutions. The management team is closely involved to orchestrate across functions. They need to master the strategy for their customer value proposition, and lead their people to be more customer-focused. The people who report to them, especially those who do not have marketing backgrounds, need a basic understanding of the principles of Value-Based B2B Marketing so everyone can have an understanding of what it means to be a customer-focused organization.
Click here to read more about Customer Centricity: Building a Truly Customer-Focused Organization
How MCE can Help
Experienced MCE Senior Associates can help your management team tackle the challenge of creating closer customer relationships based on understanding your customer need. Through consulting, mentoring, workshops or other methods, we can customize a solution suited to your needs.
Individual managers may benefit from tackling the issue in a group of peers from different industries, in a workshop led by an MCE Senior Associate:
Moving from a Traditional Make-and-Sell Model to a Premium Offer or a Custom-Made Solution
A company may decide to go for either strategy…or both. The question then becomes how to get it done through people. It starts with the sales team and key account managers, includes the operational and design people, and requires the support of the entire organization.
There is a big difference between Premium Offer and Custom-Made Solution
Each strategy requires very different management. Companies must find a way to make the difference in their organization, or they will not succeed.
The internal implications for each strategy are:
How MCE can Help
Experienced MCE Senior Associates can help your management team look into the organization, identify the implications of your chosen strategy for the customer-facing and support people in your organization. Through consulting, mentoring, workshops or other methods, we can customize a solution suited to your needs.
Individual Sales/KAM managers may tackle the implications of your strategy for their role, in a group of peers from different industries, in a workshop led by an MCE Senior Associate:
Sustainability and Customer Insight are the Drivers of Innovation
Both strategies mentioned above carry the same trend: the quality, performance or customized solution the customer is looking for is also a “sustainable” one, and this is where European companies can differentiate themselves. Sustainability often means "green" or "environmentally friendly" – but not only that. It also includes "social" and "financial" dimensions. Sustainability is the major driver for innovation in B2B companies today. Choosing a Premium Offer or Custom-Made Solution requires continuous incremental innovation to be successful. That innovation today has two targets:
- Strengthen the customer value proposition
- Improve sustainability
To read more about innovation and sustainability, and how MCE can help, click here.
How MCE can Help
Experienced MCE Senior Associates can help your management team ensure alignment of its sustainability and innovation policies with its overall strategy and Customer Value Proposition.
Individual managers may tackle these issues in a diverse and interactive group of peers, in a workshop led by an MCE Senior Associate.
Building a Closer Relationship with your Customers (and their Customers, and their Customers’ Customers…)
When B2B companies produce and sell functional ingredients or components that end up in complex products several steps later along the value chain, they struggle to have the value-added of their component fully recognized by the end customer. In many cases, you cannot sell to your customer’s customer’s customer, so it is difficult to differentiate your component from that of competitors. It is also difficult to capture the full value-added of your component.
Example: In paints, the resin is the prime determinant of the performance of the paint. Some high-quality resins may make paint dry faster. The end benefit of the resin to a painter is that he can apply a second layer within hours rather than having to come back another day, which is more expensive. This benefit also reduces the “downtime” of the painted space, for the owner of the space e.g. a painted floor in a factory. The resin can clearly offer significant added value along the value chain. How can resin producers make these benefits known to the end customer and capture their fair share of the value? There are a few strategies that can have some effect:
Marketing to or educating the end customer
If a firm has a component with unique characteristics, it has more leverage than when there are comparable products available. A firm can try to increase the perceived value of its component by emphasizing the benefits directly to their customers’ customers. This creates a “pull” effect along the value chain. This can be done by marketing directly to customers, or educating them. Either way there is a price to pay in marketing and advertising costs. Social media is becoming a more and more effective tool for this. Sometimes there are legal or value chain barriers to this practice.
One way to claim the value that the component adds is to actually brand the ingredient. An Ingredient Brand is exactly what the name implies: an ingredient or component of a product that has its own brand identity. Intel, GoreTex, Dolby, TetraPak, Shimano, and Teflon have had success with this strategy.
Two or more companies may co-brand their products. Senseo, the European coffee maker that was co-branded by Douwe Egberts and Philips Electronics has brought value to both parties.
Companies can seek to engage in strategic partnerships with their direct customers and co-design innovative solutions based on their combined strengths in product technology and market access. Not all customers will agree to this. They can go even further and invite end users or end user groups to help them design new products whose performance is of high value to the end customer.
Get involved in the sales process
Perhaps the most effective route, but the most difficult to do, is to participate directly in the selling process to the end customer.
- Find where in the value chain the real buying decision is made – find out who the end customer is.
- Find out what that customer really needs/is trying to achieve. What performance characteristics do they need?
- Select or design the component that best does the job
- Craft a strategy to influence the buying decision, including direct participation in the sales process.
- Do all of the above without upsetting the other players in the chain.
How MCE can Help
Experienced MCE Senior Associates can help your management team determine how to take leadership in creating a "value network" way of working, to improve your chances to get the business, and delight the customers along the value chain. We can help your sales and marketing executives devise strategies and tactics for influencing the choice of your end customers.
From Being a National or Regional Company to Competing on Global Markets
Many companies, especially in the “new rich” countries, are expanding aggressively beyond national/regional borders as part of their growth strategy. They already have experience in emerging markets, and now have an opportunity to take competitive positions on the global stage. Their challenge is to refine and enhance their commercial approach. They have to develop global Sales and Key Account Management teams. They must also manage their products more competitively on the global stage. And they aim to establish themselves in the mature markets of the "traditionally rich" countries.
How MCE can Help
Experienced MCE Senior Associates can help your managers plan the implementation of their global expansion strategy. We can help your Sales and Key Account Managers, and product managers, be successful internationally, including in mature markets.
Individual managers may benefit from learning skills for their global role in a group of peers from different industries, in a workshop led by an MCE Senior Associate.
Talk to MCE about B2B Customer Solutions
MCE has a team of Senior Associates with B2B corporate experience in various key industries. They have held senior general management positions and have worked in more than one country. MCE Senior Associates can help you with refining and clarifying your strategy and customer value proposition. Their experience in selling, marketing, key account management, distribution and channel management, market intelligence and customer insights, product/service systems management.
For Individual Managers
Executive Mentoring and Coaching
Individual managers may benefit by one-on-one coaching by an MCE senior associate who has experience implementing customer centricity programmes in a corporate management role. MCE associates are in a position to both coach and mentor managers who are struggling with customer centricity.
Workshops for Individual Managers
MCE offers a workshop to help individual managers plan customer centricity, customer loyalty measurement, aligning people and communicating improvements. In this workshop, your managers can interact with managers from different industries and geographic regions struggling with similar issues of customer centricity. In this richly diverse environment, they can work on finding solutions. They will benefit from the guidance of an MCE Senior Associate who is experienced in implementing customer centricity programmes in a corporate setting.
For Senior Managers
Specifically for Premium Offer Strategies
Specifically for Custom-Made Solution Strategies
For Middle Managers
For Teams, Divisions, Organizations
An MCE senior associate with corporate experience and expertise in your industry and/or management issue can mentor, advise and coach your management team on B2B market strategies, and help you plan for implementation.
Business Transformation Programmes
We help you design and implement your change programme across the organization, and manage change to align people. We use a combination of methodologies appropriate to your particular situation.
Strategy Implementation Programmes
MCE can provide tailored programmes to enable your managers to plan and implement B2B strategy in your organization.
Corporate Learning & Development
Experienced MCE associates can design and manage your development curriculum on an outsourced basis.