I’ve spent the last few months on chemotherapy and have had to visit the chemo clinic every three weeks for four-hour refills. When I arrived for my first treatment, I was scared, having no idea what to expect and was not at all fond of having metal projectiles shoved into my body. I was taken in hand by one of the nurses there, who put me in a chair and then asked me if I had any questions about what was about to happen. My chief question was “What is it going to do to me?” but as nice as the nurse was, she couldn’t peer into my future. But it was nice to be asked. She stuck me and I started to get what felt like eight quarts of chemicals fed into my body.
The nurse checked back with me about every five or so minutes. During the treatment one of my injected chemicals made me freezing cold and the nurse, seeing it, asked if I would like a blanket. “I’d like two,” I said hopefully. She not only brought me blankets—she brought me heated blankets, which helped tremendously.
Each time I have gone to the clinic, another nurse has taken me to a chair, gotten me comfortable and started the drip. I have also had many interactions with the front desk and other nurses in the clinic. As yet, I have not come across one nurse who is not unfailingly polite, helpful, and clearly focused on my needs. Because this has not been my experience with medical professionals (or in retail situations), I asked to speak to the manager of the clinic to find out how she had brought together so many competent customer-focused people. I was able to make an appointment with the manager.
She said that she would interview folks to see if they were kind and if they were listeners. I asked her how she was able to determine this. She said that she could tell if people were listeners in the first five minutes of the interview. If the interviewee interrupted or was clearly more interested in their next comment rather than what the interviewer was saying, she crossed them off. She said determining kindness was more difficult. She said she used a combination of direct questions (Give me a time when your empathy saved a difficult situation.) but also body language. She began moving like a woman in pain, with grimaces and low moans. If the interviewee asked about what was wrong, she won points. If she listened carefully to the interviewer’s explanation of the pain, she won more points. The clinic manager then said that ultimately she listened to what her gut told her about the interviewee. She said that her process required interviewing many more people than similar clinics would interview for similar positions but she also felt she had a good group of people, a sentiment with which I agreed.
I believe there is a huge lesson here for businesspeople. If you hire kind listeners—not just for customer service positions but also for executive, managers, supervisors, line employees, salespeople, warehouse people, you will end up with customer-focused people. It will cost you more interviews. But ask yourself how much non-customer-focused people have already cost your company. JS
One of my favorite parts about Columbus, Ohio is the Short North. I enjoy all the independent restaurants and shops. I just read an interview with a local business owner, Ryan Vesler, owner of the popular t-shirt company Homage. He is opening a shop in the Short North soon, and has a great interview in the Metropreneur.
Before starting Homage, Ryan said he was selling vintage clothes on eBay-- he says it was that experience that gave the biggest insight into the importance of customer service and his relationships with customers.
This is such an interesting insight, particularly because the natural assumption is that e-commerce eliminates customer service.
What do you all think? Do you have any experiences with e-commerce and outstanding customer service, or a bad experience from a lack of e-commerce customer service?
Costco continues to amuse and amaze by offering more than the usual products to pile in the cart. The Costco Connection magazine for June (www.costco.com, "connection") has a page devoted to "Fresh Views," with mini-features on: Wally "Famous" Amos (who has moved on to found Wally's Muffin Company),brainstorming techniques, and a quick summary of a 2009 book, Extraordinary Groups: How Ordinary Teams Achieve Amazing Results.
My big takeaways this month, aside from a hankering for a muffin or a chocolate chip cookie, were from Extraordinary Groups. One - not quite an aha! moment - was that a group dynamic can hinder, rather than stimulate, group productivity. The other was that "exceptional experiences can be thoughtfully nurtured and intentionally encouraged."
Good stuff, but the authors may have missed the larger point, which is that transporting tools and techniques for elevating group performance, to the operation of business relationships involving entire companies, can magnify and multiply the consequences of what might be accomplished.
Maybe an even greater message, though, lies in how Costco works at a fuller customer relationship by providing unexpected value, beyond the nuts and bolts of selling them tires and tube steaks.
Kathy: How do you think that your skills and ability in handling business relationships have evolved over your career?
Todd: I think that from where I started to where I am now I have a better appreciation and understanding of my customers’ business. And I think that by that evolution I’m able to talk more of their talk, obviously bring more value because I do understand their business. And by virtue of bringing that value, I believe that creates a better relationship. There is trust, there’s experience, there’s information flow, all those things.
In turn, again, I think that understanding your customers’ business builds a whole foundation for a relationship and things go along with that.
Kathy: So is it just your maturity or your experience of understanding the business?
Todd: Understanding through time, their business, and all the intricacies of their business and what they believe is value, what their issues are as they go about their day-to-day. Of course understanding what we do for them and put it together. These processes build relationships that are pretty much invaluable as you get to the end of the day.
I really believe when it comes to selling and the art of building relationships some of this is just inherent. I think you either have it or you don’t. I don’t think there is an in between.
So yes, you can get a better foundation, a better baseline, but when it comes down to it, to answer your question—I had somebody to show me the door, but when the door was open I inherently knew the things necessary to take those relationships and build on them.
Kathy: Do you look for that in hiring?
Todd: We sure try.
Kathy: It’s easier to teach them product than it is to teach them inherent skills.
Todd: It really is. And unfortunately we’ve hired people and we’ve had to let people go, not because they are not good people, but because when what we are trying to do in the market somebody can be very technically based and understand products.
But when the day is done if they can’t make a connection with somebody and build on that, then it’s not going to work. So unfortunately we’ve hired and let people go simply because they got to a certain point where they had all the technical skills in the world but that inherent piece, relating to a customer, couldn’t be met.
Kathy: Do you think it can be taught?
Todd: I don’t think it can, I really don’t. Some people are better than others in terms of how well they are able to get in there and connect.
One of the conversations I had, Kathy, you know this, is we had a regional meeting a few months ago. We were talking about our staffing and the people. We really tried to assess our competitors. We know what we are about. We know the things we are doing. But we really tried to put our shoe on the other foot of our competitors and figure out what they do better.
One of the things that came up from one of our formidable competitors is that they are just “guys guys,” as we put it. They put a team together that people want to be around. This is the stuff we are talking about—the inherent ability that they hire the people who have the innate ability to get in and make things happen, to build relationships.
We have better technical people, I’m convinced. But at the end of the day a lot of our customers want to be around people they want to be around. I don’t think you can teach that, I think you know it.
Kathy: All the inside sales people that I’ve listened to, the relationships that they have with their customers, is amazing. How do you measure it? How do you know if they are developing good business relationships?
Todd: How I gauge it today is far different than how I used to gauge it. Today, as I look at it is, are we able to use this relationship to make money? Because their—our customers’—job, and I don’t begrudge anybody, everybody is doing the job. But their job is to buy the best they possibly can. Our job is to sell the highest price we possibly can.
Relationships give you the opportunity to negotiate or give you an opportunity to do the work. I’m gauging the relationship today as, ‘Can you do all that and at the end of the day you are making money?’
We want better relationships. We don’t have a training program for that because, again, it is right back to what I said. We know inherently people either have it or don’t. We put them in the position. We want them to get to know people. We want them to do the things that they are doing.
But our managers now are really trying to use relationships. At the end of the day, are we able to use those relationships to make money?
It is not any more or any less just trying to be equitable with our customers. We are just trying to find that equitable approach where we are both winning in that situation.
Kathy: What advice would you give people, be it in sales or finance or operations, who really want to develop their business relationship skills?
Todd: Unfortunately you tend to live in the snapshot of where you are today. Things are changing so fast that you can’t assume anything anymore.
You can’t assume you have the relationship. You can’t assume you have the share. You can’t assume that you are doing great on service.
Make sure you understand what is in front of you because in some cases we are assuming a lot of things out there that just aren’t the case. Again, the economy has forced people to really do things they wouldn’t even consider doing a year or two years ago. That’s the assumption piece I was talking about. We just can’t assume much.
But I still believe on the relationship side of things, that at the end of the day it’s still what is keeping us in the game.
Price is big, but that same survey I mentioned, price was 3rd out of whatever category. It was still about trust and still about the product, the value and then of course price was there. It’s not the end all be all. But I think relationships are still giving us that opportunity to succeed to the best of our ability in the market today.
CNN Money has a great question and answer piece from the manager of a team of customer service representatives.
She wrote in by saying that 99% of the time, she is able to resolve customers’ problems amicably, but every now and again, she has to field a call from an irate customer. Her usual response is to have the manager one level above her take the hostile call.
She says that manager, in response, blames her and her team of customer service representatives, and as a result, this deflates her team’s morale.
The question posed in this article is: How do you handle difficult customers? Who comes first at your company, customers or employees?
Several people weighed in on this conundrum, and the adage the customer is always right pops up more than once in the article.
I can understand the significance of the customer being right. A company’s success—certainly the financial success, but success overall-- depends heavily on the relationship with the customer.
The morale of the employee team is also very important and imperative to a company’s success. If a company cannot retain its employees and has a high turnover rate, it sends a message that the company is not a friendly environment in which to work. Who wants to support a company that does not respect its employees?
In the end, I think it is important to find the balance. Yes, a customer is paying for your product or services, so their needs and expectations must be met. That transaction is very clear.
But I also think it is paramount to treat employees with respect and to show appreciation, because those people are representing the company. Their interactions with customers are a direct reflection of the brand. Therefore, their satisfaction is necessary to maintain the brand’s reputation.
So, what do you all think? In a situation like this, who would you put first—customer or employee?
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http://www.feedstuffs.com/ME2/dirmod.asp?sid=F4D1A9DFCD974EAD8CD5205E15C1CB42&nm=Breaking+News&type=news&mod=News&mid=A3D60400B4204079A76C4B1B129CB433&tier=3&nid=820CC37E7FA94C2387B4E483F38D04F7
This article focuses on the business relationship between a large supplier, Monsanto, and the every-day American farmer. Farmers can create margin on their product by using new innovations, such as the biotech seeds Monsanto produces, which increase the quality and yield of a product. Monsanto understands that their competitors cannot duplicate the value of their innovations, so as a differentiated supplier they raise the price of their seed. The seed provided by Monsanto can exponentially increase the growth of a farmer. However, because Monsanto is the only supplier with this quality seed, they increased price hinders the farmer’s growth. Recently, competitors of Monsanto have been decreasing their seed prices in order to gain customers by taking advantage of the large price gap between their seed and Monsanto’s.
This is relevant to the topic of business relationships because Monsanto has noticed their customer base decreasing, assed the situation, and have put time and effort into solving the business-to-business problem. Monsanto has understood that the needs of their customers are not congruent with their expectations. In order to clarify the farmer’s situation and goals for the future, Monsanto took twelve months to personally visit with over 1,200 customers. At these visits, Monsanto discovered how the farmers view their product and company. The supplier concluded that they have an “unmatched toolkit” compared to their competitors.
After thinking about Monsanto’s, the competitor’s, and farmer’s situation, I asked my self a few questions. Can the competitor’s create a bundle so that price sensitivity is not the only reason why customers choose their product? Will farmers have no choice but to purchase Monsanto’s seed because of the quality? As a supplier with an “unmatchable toolkit”, will Monsanto continue to make an effort to personally visit with their customers?
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http://www.feedandgrain.com/print/Feed-and-Grain/Looking-to-the-future--Observations-from-the-millwrights-vantage-point/1$2013
North America is a weak spot in the global drinks business, largely because of the decline of carbonated soft drinks. With PepsiCo’s soda volume dropping 5 percent last year, according to Beverage Digest, the company had to figure out how to restructure its distribution network in order to fill customer needs more readily. Last year, PepsiCo agreed to purchase it’s two largest independent bottlers for $7.8 billion. This all comes at a time where the carbonated beverage market is losing share to healthier, non-carbonated products like juice and water. Ten years ago, soft drinks comprised 70% of PepsiCo’s beverage selection, where today they are responsible for only 45%. PepsiCo wanted to put an end to the days in which it argued with bottlers over profits and plans for new brands. When the company wanted to try new drinks or package sizes, the requests were sometimes hard for its big, independent bottlers to fulfill at the pace Pepsi wanted. That highlighted one of the central tensions: Bottlers thought Pepsi was too demanding, and Pepsi thought bottlers didn’t move fast enough. Big decisions between PepsiCo and its large bottlers too often became tug-of-wars over revenue, sales volume and profits. This shows just how willing partners must be to work with one another and just how important it is for businesses in partnerships to respond to the wants of the other. The new system put in place by PepsiCo now allows for a more integrated and seamless operation. This allows more flexibility to move with consumer’s changing tastes and compete with rivals like Coca-Cola in the short term. And in a time where big-box chains like Wal-Mart and CostCo continually demand lower prices, this acquisition allows PespiCo more negotiating leverage than its rival, leaving the boys at Coca-Cola to play catch-up. http://online.wsj.com/article/SB124939009522504571.html
The organic food market is taking a hit from the impact of the recession. Sales dipped 17% according to the Organic Market Report of 2010. Many people have chosen to cut out organic products as a way to save. However, according to a UK supplier, Devonbased Riverford Organic, organic sales are still doing well primarily in the Southwest United States. This company has established itself as a company that values the flavor of the foods as well as ensuring that the products are organic. By having customers give feedback through an annual customer survey, the company is aware that the brand loyalty is found within the great flavor of the foods. This differentiation has kept sales up through the loyalty of the customers. Another strength in having a customer survey helps the company stay aware of what the customers value in a product. As a result, the Devonbased Riverford is in the position to better fulfill these needs. Although the company has high hopes for the future, they believe that organic products may become a thing of the past as government regulations tighten on local produce.
Empire Valley Ranch is a family farm in British Columbia, Canada who was using the conventional channels to market their cattle. They would sell their weaned calves on the spot market to area buyers most likely for an established per pound live weight. Essentially they were selling a commoditized product to a faceless buyer. However, they have decided to differentiate their product by taking a risk and switching to a system where they finish their calves on a grass-fed diet and production is free of hormones and antibiotics. This allows them to enter a niche market with fewer buyers and for the time being higher prices and greater margins. They have had to establish direct relationships with their customer base in order to assure their product can be moved. “One must be able to build a real relationship with your customer. Once you build that trust then you most likely will have a customer for life/There is nothing better than a person coming in or calling to say they love your beef.” –Joyce. The risk seems to be working out for them and their new customers.
http://www.bclocalnews.com/bc_cariboo/williamslaketribune/community/89484742.html
http://stateofthebrand.com/?p=94
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This is a nice article about how Cargill starts with problems faced by customers, in this case the high salt content of Campbell’s Soup, and finds a solution. Salt is slowly taking center stage for significant regulation by the FDA. The medical and nutrition communities are fairly united in their concern about the overly high levels of sodium and potassium in processed foods. At issue for the food manufacturer are changes in recipes, effects on brands and consumer loyalty, increases in costs of materials, and reduction in shelf life. At one level the "SaltWise" story is a classic business relationship story of a supplier solving a strategic problem for a buyer. At an equally powerful level this is a great story about a firm with a long history in commodities who turns a low valued undifferentiated good into a high value/high margin industrial ingredient.
For the students of ACE 430. We talked about the seminal article by Dr. Theodore Levitt where he introduces the concept of “table stakes.” It is the industrial marketer’s task to bundle information, service, and innovation around the product to create value for the customer. The “Saltwise” story is a wonderful example of Cargill investing in R&D and supply chain relationships with food manufacturers (Campbell’s) to simultaneously solve a strategic problem for the customer while creating a differentiated market for themselves. The interesting question is when looking at the “Value Creation Half-Pipe,” what value does Cargill provide to Campbell’s? Certainly reduces the regulatory, brand, and potential legal risks from selling high salt products. Maybe also reduces the risks associated with market share losses to other competing low salt products. On the uplift side, is Campbell’s able to achieve higher margins? Certainly the cost of salt as an ingredient rises, but can Campbell’s margin up with their healthier product?
Arby’s has made a joint venture with McLane as its distribution channel. This will help Arby’s to expand its market shares in Texas and surrounding states by using McLane’s great distributing system.
I think it is a good idea for Arby’s to be partnered with McLane due to the benefits they will receive. Being a partner with McLane, McLane will provide many services to Arby’s such as logistics, procurement and inventory management solutions. In addition, a vice president of supply chain at Arby’s Restaurant Group said that McLane’s efficiencies have supported their growth as a world-class supply chain organization. On the other hand, McLane is also happy being a distributor of Arby’s because Arby’s is a great and successful restaurant.
I think this is significant because both of the companies are benefited a lot from this joint venture. I think overall it will increase both companies’ profitability and will build a strong relationship between them. Plus, as Arby’s expansion increases, it will create many jobs for people.
I think it is not easy to pick a good business partner like Arby’s and McLane. There are various criteria to be considered in order to make such decision. For example, they need to consider whether they are sharing the same objective and code of ethics. This will prevent unnecessary disagreements which can disrupt sales. They also need to think about the image and the reputation of the companies and whether they received positive customer feedback.
What do you all think about this article? Please comment on it!!!
http://www.food-business-review.com/news/arbys_beefs_up_relationship_with_mclane_for_texas_market_091117
Customer Needs Assessments require active listening and quick critical thinking. Customer needs assessments serve as tools to help clients problem solve. They work well to address and resolve customer vision and priorities, create and capitalize on business opportunities, end dissatisfaction with underperforming suppliers, recover deteriorating relationships, strengthen existing relationships, grow and thrive in developing industries, develop greater understanding of a competitor, and improve overall performance.
This makes customer needs assessments seem straight forward, and in many cases, they are not. The best and most successful consultants will listen to what the client says about the customer needs assessment and be able to sift through the words to pull out the real issue, which may be hidden.
This boils down to one of my favorite principles of business management and relationship management: listening. It is a very real, very critical and powerful skill.
Ralph Roberts is the President of Worthington Industries Integrated Building Systems.
He took a moment to talk with Kathy Hoyt and discuss the role of business relationships in his success and the success of Worthington Industries.
Kathy: How has your approach evolved throughout your career?
Ralph: I’ve seen the full spectrum from concentrating on personal relations to company centered Value Propositions.
In the economic down turn in the 80’s the personal relationships were being limited due to less money being spent on entertainment. The shift went to B2B relationships and became more professional.
Relationships are being replaced by associations and event shows instead of a high concentration on “entertainment”.
Today it’s about how your business value systems are similar to your customer’s business relationships value system so you can work together.
Kathy: Who helped you develop these skills?
Ralph: When I first started Worthington Industries 37 yrs. ago the company was small so I had access to the Executives. These Executives had a strong customer focus and I saw them dealing with customers on a daily basis.
The WI Philosophy was already in play and was being demonstrated in the contacts with customers. The philosophical needle was very important in all areas of the company and an esprit de core was developed and lived.
Kathy: How have the skilled contributed to your success?
Ralph: The skills applied to all aspects of the business. The philosophy was driven throughout the organization.
You got put into situations and had to deal with it. There were no training programs so you had to figure things out for yourself. Some survived and some didn’t.
The common values were the deciding factor. When faced with a tough decision, I did the following steps:
The Philosophy card “taught” you the skills you needed.
(Note: When Tom Peters interviewed John H. McConnell there were no written policies in place – only the Philosophy card!)
Kathy: Can you think of a time when the relationship saved the customer?
Ralph: The Tenneco Company had had a relationship with Worthington that wasn’t so good. When we called on the purchasing manager he said he would never to do business with us again.
After repeated calls over a period of two years, we were finally able to rebuild the relationship by showing them we could add value to their company. It turned out to be one of our largest contracts.
Allen Bradley was a targeted account for us and when first contacted, the said “no.” The account manager was instructed to call on them every 6 weeks, develop the relationship, show how WI could add value.
Our reasoning was eventually they will get in trouble and when they do, we will be there to help. It worked.
Kathy: How is business relationships managed as a core competency?
Ralph: Today the Philosophy is formally introduced in the orientation program and is reinforced through all facets of training and interactions.
Look at the card to make a decision. We also use the TIPS process we learned through S4 to improve our listening skills and really understand our customer’s needs.
In 2008, we started a “Transformation” that brought teams together to become more efficient. Customers are seeing improved quality, service and cost effective solutions.
When customers tour the plant, an operator is able to talk to the customer and tell them exactly what they are making for that customer. Customers feel good that WI is doing all it can to improve quality, service and cost.
Kathy: When did the relationship cause you to lose a sale?
Ralph: I had a great relationship with a customer and thought he would never take away his business but he told me that we weren’t competitive with our pricing. Just because you have a great relationship you have to remain competitive.
He gave all his business to a competitor! A good business relationship is good to have but not enough to keep the business.
Kathy: What advice would you give about building relationships?
Ralph:
Kathy: If you could give one piece of advice, what would it be?
Ralph: How well do you know your top 10 accounts? Not the statistics and number but what is their growth plan, fears, and can you help them meet their business goals.
Can they articulate how Worthington Industries is helping them? There should never be any surprises in working with one of your top 10 customers.
Kathy: How has the economy effective business relationship?
Ralph: There is now a new normal. Employees are being cut from the work force and organizations have to go deeper than they would like just to stay in business.
Trust gets hurt and will take a long time to recapture it. Some companies have had to cut the number of suppliers they are using just for economy of scale – even if it was a good relationship.
In some cases, some of the preferred suppliers have gone out of business forcing them to buy from a company they might not like.
Companies are worried about the financial stability of the suppliers even if the relationship is good.
These are very trying times but it will come back. As the market comes back WI will be well positioned because we have quality products, a quality company and financial stability.
Ralph Roberts has been with Worthington Industries for 37 years. He currently serves as President of Worthington Industries Integrated Building Systems.
He serves on the Boards for Worthington Armstrong Venture (WAVE), ThyssenKrupp Steel and Worthington Industries (TWB) and Spartan Steel Coating for Worthington Industries.
There may be some subtle difference between harping and nagging; if there is, it escapes me. I do know that harpers and naggers often try to take cover under the But-I-Was-Just-Reminding-You bushes.
So, why do I keep harping on the importance of well-conceived and executed business relationships in the world of supply chain management?
For openers, Chuck Poirier from CSC, Morgan Swink from Michigan State, and SCMR's Frank Quinn have recently published Diagnosing Greatness: Ten Traits of the Best Supply Chains. Their ten common denominators that lead to higher revenues and lower operating costs include "collaboration with selected partners" and "high customer integration and satisfaction."
When two of the ten components of greatness are directly related to core principles of business relationships (and contribute mightily to at least four of the others), I believe that little more needs to be said.
It's time to get off the win-lose bus and on to the win-win express of business relationship management in supply chains, don't you think?
Ron Maciejowski is the Vice President of Sales for Worthington Industries. He sits on the board of all Worthington Industrial Joint Ventures and Recreation Unlimited.
Kathy Hoyt, a senior consultant with S4 Consulting, sat down with Ron recently. The interview is transcribed below.
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Kathy Hoyt: How has your approach to handling business relationships evolved throughout your professional career?
Ron Maciejowski: In the early days (1970's) there was more of the attitude that there was enough in a sale for everyone to be profitable. The pie was always growing and all parties could profit (our company, our supplier, our customer).
Today , many people think the pie is a set size which means you have to take the profitability out of someone else's pocket. To some extent that is true if we don't get back to growing our economy in the right way and making the pie bigger. This has put much stress on the customer/supplier relationship.
Kathy: Who helped you develop business relationship skills and how?
Ron: Mentors, the guys who brought me into the business. They showed me here's how we do it. You have to build the relationship to get close to the customer. You do that by:
Kathy: How has your attitude and/or skills contributed to personal or company's success?
Ron: I learned by example. If I made a mistake, I wasn't called on it openly in public. I learned to do the same things with my people. People are much more productive if not publicly reprimanded.
I also learned to listen to "the other side" of what was being said - try to understand both sides before jumping in.
Kathy: Can you recall a time when someone handled a relationship in such a way that it saved the sale?
Ron: Yes, there's been times when we walked out better than when we walked in. When there was a problem with a customer and it was our fault we would go in, accept responsibility, offer no excuses and get the problem fixed as soon as possible.
Other opportunities can evolve if you just admit it and fix it because if you can't fix it in a timely manner it will kill the relationship. As part of supply chain, we don't have total control over a situation but the main thing is don't make excuses - just fix it.
Kathy: Can you recall a time when the absence of a relationship has lost a sale or a customer?
Ron: We had a customer recently who didn't feel we thought he was important. A quote got to this customer which was completely inaccurate - way too high.
He assumed we didn't care about his business and we were just sending a quote to get it off our desk. We had been doing about 40% to 100% of his business and he pulled it all because we didn't appear to care enough about him. It certainly was not the case (many internal discussions about what went wrong) because it in fact was very important business to us.
We are working very hard to recapture our customers trust and confidence.
Kathy: What does Worthington Industries do make relationship management a core competency?
Ron: Everyone does it differently but our philosophy of treat the customer they way you want to be treated has always applied.
The philosophy is presented during orientation and reinforced. If someone doesn't buy into the philosophy, they usually don't last very long around here.
Kathy: How do you measure to see if business relationship management is working?
Ron: Amount of business from that customer, they tell us about opportunities for new business and if they come to us for solutions to help their business we know our relationship is solid.
Kathy: What advice do you have to give to people who want to develop skills in business relationship?
Ron: Listen to what the customer is saying. Everyone wants something from you. You just have to learn what the gap is (the difference between what they have and what they want) and then figure out what I can do to fill the gap.
Kathy: What one piece of advice would you give the people who are managing customer relationships?
Ron: Put yourself in the customer's shoes and treat him the way you would want to be treated.
Give the customer timely information, correct information and do what you say you are going to do.
Kathy: How do you think the economy has affected business relationships?
Ron: Everyone is fearful right now about their companies staying in business and their keeping a job.
People are more stressed and just want more time at home. The relationships today are on a more professional level than in the past. However, it is a mistake to assume that people don't buy on personal relationships.
That gets back to building trust, gaining confidence by doing what you say you will do and making the customer look good by providing excellent service and providing a high level of perceived value.
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Thanks, Ron!
Business Relationships Members, do you have any other questions for Ron or Kathy?
Ron Maciejowski began his career with Worthington Steel in 1972 and held various sales posiions until going into management in 1981. He has served as Vice President of Sales at Worthington Industries since 2008.
In the real world, partners in supply chains typically have widely varying skill, competency, experience, and maturity profiles. That's consultant-speak for "some players are stronger, and some are weaker." In leveraged and progressive supply chains, the stronger partners have responsibilities to lead, mentor, and teach the others how to get better, not only in raw performance but also in risk management and mitigation.
If the grown-up in the room finds that the other organizations in the overall supply chain can't or won't respond to the required leadership, perhaps they aren't the right partners. On the flip side, if the weaker players aren't getting the leadership and instruction they need to grow and eevelop, maybe they're in the wrong supply chain altogether, and need to find new relationships.
It's sad to see the "A" players and the "B" players pointing fingers at one another like 6-year olds in the wake of a problem. The "A" players have got to act like grown-ups, or maybe they're not really "A" players where it counts. Size and naked power alone do not confer grown-up status on a supply chain partner.
This challenge can become mission-critical for ultimate supply chain success in the marketplace when one of the partners is a logistics service provider (LSP, or 3PL). While it is possible that a relatively new 3PL can be manhandled by a big and savvy customer, it is frequently the case that the customer is less-experienced and less-aware than a diversified multi-customer service provider.
That's when the LSP - in a genuine supply chain business relationship - needs to be the grown-up in the room, and lead the customer to success, taking every care to not let the customer slip off the path into a dismal swamp of risk and failure.
I watched with interest as the evening news showed a fit, older woman easily shoveling more than 20 inches of snow in Duluth, MN. I was impressed by her strength and serenity. For her, it was business as usual. The segment reminded me of friends, who live in Duluth and who say, "The weather in Duluth helps keep the riffraff away." No kidding! That much snow, especially on a regular basis, is not for the faint of heart.
Then again, snow or no snow, 2009 wasn't for the faint of heart either! Throughout the year I watched businesses struggling to clear their paths by cutting costs, improving productivity, fortifying customer relationships in an attempt to regain their balance in a market free-for-all. For them, it was not business as usual; it was heavy lifting.
Many leaders of those companies are relieved that the year is over and that their pathes are a bit clearer for 2010. Many are also exhausted. If you were one of those who felt that 2010 was heavy lifting, may you find renewed strength in 2010. For those of you exhausted in the process, may you find rest and renewal in 2010. And for those of you for whom this year has been a time of growth, may you rejoice in continued growth in 2010. Happy new year to all!
Sallie
A few weeks ago, I read a disturbing article in a respected business publication. It boldly stated that tough economic times demand pulling out all stops in Customer Service, even at the expense of personal and family commitments. The implication was that extra effort applied to all customers and prospects would create competitive differentiation. Hey, I've got news. I know a guy who sells insurance of all types, as well as investment instruments. I guarantee he spends more time, effort, and creativity on customers like Alex (A-Rod) Rodriguez and Dwayne (The Rock) Johnson that he does on some weasel out shopping to save ten dollars on his auto policy premium. This translates, I think, into lessons for B2B business relationships. And may raise some questions. For example, why isn't exemplary customer service (albeit stratified and customized to the situation) a minimum requirement in any economic environment? Or, how much will a client or customer respect and value someone who can't keep work and life priorities straight? And, do you really want a relationship with a customer who doesn't respect and value your total person? Beyond that, at the individual level, going beyond the "extra mile" (to what, a mile and a half?) for every customer is a shortcut to burn-out and breakdown. It is at the organizational level, too, and the breakdowns can be costly, even catastrophic. What do you think? Is working harder, not smarter, the answer? (My bias may be showing.) Is redefining customer categories and custom-crafting appropriate relationships a better way, at both individual and organizational levels? Is more effort on the low-priority prospects robbing you of time and energy for valuable collaboration with high-potential customers?
I’ve been trolling the Internet for articles on relationship management and have been finding hundreds of them, all free, and most worth the price. While there are many many insights provided, they were usually on very high level. I could find few essays where the conclusions merited being included on this site.
When I broadened my search a bit, I came across an article that would appeal to business-to-business sellers and buyers. It’s by Erin Anderson and Sandy D. Jap, it’s called The Dark Side of Close Relationships. It appeared in the Spring, 2005, issue of the Sloan Management Review. I believe our readers should get their hands on it for a number of reasons, not least of which is that Anderson and Jap’s research included studying over 1200 business-to-business alliances.
Anderson and Jap argue that “Relationships that seem to be doing well are often the most vulnerable to the forces of destruction that are commonly building beneath the surface of the relationship. In other words, close relationships that seem the most stable can also be the most vulnerable to decline and destruction. We refer to this phenomenon as the dark side of close relationships.” (hard not to think of Star Wars)
One of he ways this dark side manifests itself is when both firms “are confident and optimistic about their collaboration….Since no trouble can be seen on the horizon, there is no apparent reason to change course, strategy or tactics.” The problem here is the assumption that things are going well can deaden the sensitivity of one or both parties to the relationship, and they may act opportunistically. Anderson and Jap use a great example of an auto painter who had a long relationship with the brand automaker and starting using two coats instead of the required three.
This agrees with our findings that firms in a relationship tend to assume that when no noise comes from the partner, the relationship is doing very well. I remember being hired by the CEO of a huge transportation company who said to me, “I cannot believe that things are going as well with our large customers as my account managers say it is.” His insights were solid—the account managers were burying problems they thought they would be blamed for. By bringing new sensitivity to the key relationships, the company was able to forestall serious problems and even, in one case, the customer seeking another transportation company.
Anderson and Jap feel that the dark side of relationships occurs when firms focus on three mechanisms: The creation of immediate benefits [which can lessen the effects of long-term value]; the development of strong interpersonal relationships [which, if there are few of these can result in an account manager taking customers with his/her when they leave]; and unique processes and adaptations, where the firms invest in the relationship [these investments may not be reciprocated.]
How to keep the dark side from appearing in relationships? “Prevention,” Anderson and Jap say, “is the best medicine. Bolstering relationships--through regular evaluation, backup plans (having a back-up account manager, for example] and crisis management--helps create efficient. motivated and productive relationships….”
I do disagree with one conclusion that the authors suggest. They say that to keep a relationship fresh, one should change the people close to the relationship every two years or so. Assuming that he/she is effective, most accounts would scream bloody murder if their account manager should be replaced every two years.
The article is around ten pages, it is not written in over-academic prose and it supplies many examples which I cannot include, or this piece might have been as long as the Sloan essay. It’s worth your time. Check it out. JSperry