Key players. Who are the key players? Are they people that you would enjoy working with? What are their business philosophies? Are these similar to yours?
Relationships. How is your relationship with the potential partner? Is it a long-term one? Have you worked well together? Has there been a history of give and take? Do they see you as a leader in your field? Do they value the relationship as it now exists? What partnerships have they formed with other suppliers? How successful have those been? Favorable answers to most of these questions would suggest that you have a basis for creating a partnership agreement.
Developing a Strategy
You cannot antagonize and influence at the same time.
UNKNOWN
Developing a long-term relationship with a client is challenging and difficult and rewarding. It evolves out of a conscious process.
Key steps in creating a strategic alliance with a client include these:
making the decision to change the nature of relationships with customers
identifying ideal partners
researching the potential partner’s organization
formalizing the relationship
organizing for success
managing the ongoing relationship
Let’s look at each one of these stages:
Making the decision to change the nature of relationships with customers
This change in direction could be prompted by
reduced market share
a rise in claims and returns
mounting complaints
high turnover of clients
a proactive new strategy
Identifying ideal partners
With a decision made to get closer to the customer and build long-term partnerships, you should “pilot” your new approach with a small select number of clients before adopting this approach universally. Ideal partners would be organizations that
see price as only one factor when making buying decisions
can benefit from ongoing support after the sale
provide you with a significant portion of their business
would find it difficult to switch suppliers without incurring significant costs and disruption
see you not as a necessary nuisance but as a valuable resource
Researching the potential partner’s organization
This is a must. The information gathered will enable you to create a secure, long-term relationship.
Formalizing the relationship
Documentation of what each party will do to preserve the relationship is required. This could be a contract or letter of understanding. This understanding will cover
key deliverables
pricing
joint marketing plans
definition of points of contact
mechanisms of how the relationship will be managed on a day-to-day basis
Organizing for success
Most organizations are inadequately structured for managing partnerships with clients. Implementing the following practices will ensure that an organization is structured effectively.
Create a team to manage the relationship. The team would be an interdisciplinary group comprising people from all aspects of the organization.
Document the processes that are key to an effective relationship.
Streamline the important processes between the organization and clients.
Empower people in the team to make decisions that will ensure the minimum of bureaucracy.
Treat the team well, since their morale will have a huge impact on the ongoing relationship with the client.
Restructure people into teams that focus on the customer, not on a function. Having interdisciplinary teams that “own” an entire process is far better than having to deal with multiple, competing organizational silos.
Change the mindset of everyone from
“obtain customers” to “retain customers”
short-term sales to long-term relationships
minimal service to top-quality service
“that’s not my responsibility” to “how can I help?”
Change the performance management system so that rewards are based on process results, not short-term sales, and key indicators of the relationship are tracked and shared with all stakeholders.
Managing the ongoing relationship
Managing for the long term will include
holding ongoing meetings with the client to review and continuously improve relationships
making constant creative improvements that will delight and impress the client
looking out for new opportunities to assist the client with additional services not originally considered.
The more effective you are, the easier it will be to expand the relationship and the volume of business.
Creating a Seamless Electronic Supply Chain
Strategic planning is worthless — unless there is first a strategic vision.
JOHN NAISBITT, AMERICAN BUSINESS WRITER
Technological advances are enabling all parties in a supply chain to collaborate in ways that will dramatically improve margins, reduce costs of supply and inventory, and ensure a higher level of availability of inventory for the consumer. As part of the business-to-business (B2B) explosion, more and more organizations are using electronic tools to create a collaborative planning, forecasting, and replenishment system that enables all partners — vendors, customers, and employees — to build value and a competitive edge.
Most supply chains are inefficient. They are characterized by
short-term arrangements between supplier and buyer
suspicion
ongoing negotiations based on price
secrecy
passing on of blame for ongoing problems
high costs
high levels of expediting
Electronic Assisted Sales Integration (EASI) is an attempt to establish a partnership that binds both parties to integrate their operations electronically and organizationally, and create a seamless service for the customer. The benefits of working together are
higher sales
lower inventory levels
higher availability to the customer
reduced lead times
reduced need for dealing with high-cost exceptions
Operating the system, once operational, is made easy with sophisticated electronic tools. For example, if the forecast of inventory needed at retail differs significantly from that which the producer is making, then the system would trigger an e-mail to both parties alerting them to the potential problem. Both parties would connect immediately, and resolve the discrepancy quickly. The communications could be done in any number of ways, including having a virtual meeting and using a whiteboard to brainstorm for solutions. Electronic integration will also promote automated ordering of inventories, thus eliminating human errors. For example, in a machine-to-machine (M2M) e-commerce environment, a company’s computer would order goods from its supplier/partner when inventories run low.
The relationship is based on
a win-win approach
the sharing of information
joint planning
joint goal-setting
simultaneous execution of activities
measurement of performance
proactive problem solving
celebration of successes
The primary advantages of EASI are that it
removes most of the uncertainty in the supply chain
creates seamless processes that reduce cost and waste
creates mechanisms to highlight problems in advance
provides tools to ensure that the “problems” are headed off
The primary obstacles to taking advantage of this new approach are
a combative culture based on suspicion rather than a collaborative one based on trust
an unwillingness to see these strategies as a key to survival and growth
unwillingness to share sensitive data for fear that it will be used against the organization
treatment of the change as a pilot to be terminated if results do not meet expectations. A pilot approach is sound only if one is determined to learn from it and continually improve an expanding number of partnerships.
Key measures of success are
increased sales
reduced inventories
fewer exceptions, expediting, and costs
A collaborative electronic system is best established in the following phases:
Appoint someone to champion the new initiative. This needs to be someone senior who has the power to make changes and establish contractual relationships fairly quickly.
Negotiate an agreement in principle, setting out the broad framework and goals.
Create a project team comprised of all stakeholders. A consultant may be useful, especially if they have been successful in facilitating similar relationships elsewhere.
Pick the software system and vendor that will customize a solution for you. Someone capable of supplying an integrated, turnkey solution is preferable to buying pieces of the puzzle from a variety of vendors. Latest, state-of-the-art systems include
person-to-person (P2P) document sharing, outside of the Internet
voice conferencing
active whiteboards for team communications, including problem solving and decision making
instant e-messaging for both hand-helds and wireless devices
Develop a joint plan to manage the process collaboratively.
Pick a pilot project. Test the newly created system with one product so that lessons can be learned and improvements made before expanding the process to other products.
Forecast sales together. Identify exceptions to the forecast. Find root causes and work to eliminate them so that forecasting by both parties increases in accuracy.
Forecast orders together. Identify exceptions. Find root causes and seek to prevent them from happening again.
Generate orders.
Fulfill orders.
Monitor and evaluate the partnership on an ongoing basis.
A Team Approach
A mile walked with a friend has only one hundred steps.
UNKNOWN
A strategic partnership with a client is too difficult and important to be handled by one person or a single department. A team of people who together add value to the relationship should manage the relationship. Creating such a team is not the function of a salesperson; it is the duty of senior management.
Here are some pointers to establish and maintain a successful service team:
Study the existing system to find flaws. Most organizations have cumbersome, inefficient work processes. Waste, duplication, and delays are everywhere. To identify these issues, identify key processes that impact on customers.
Document them on a process flow diagram.
Identify all the inefficiencies, including delays and duplication.
Look for ways of improving the process dramatically. Do this through a combination of brainstorming for new ideas, identifying new technologies, and making organizational changes. Benchmark your approach against that of industry leaders to identify additional improved practices.