Cost Release, Efficiency and Effectiveness

What are the common problems facing Customer Management organisations seeking to move up the Trust Ladder and how do they tackle them to improve performance?

Our second blog focuses on ways to work for cost-release while improving customer efficiency and effectiveness. This means developing Co-existent relationships into ones that deliver results.

Cost-release

has been the focus for efficiency and improvement in recent years, yet few organisations effectively translate commercial needs into operational capability to grow business. Savings identified within the supply chain evaporate through poorly executed Customer Management within relationship based selling, giving away hard fought rewards.

These problems frequently occur at the level of ‘Co-existence’ or shared dependence, where relationships exist at a transactional level with little knowledge or understanding of each other; the focus is product driven – to meet a supplier’s basic need.

To move away from this, organisations need to develop a relationship with customers which deepens trust, and takes a longer term view to unlock mutual volume and value. However, firstly, they need to know whether it’s worth the investment.

Decisions must be based on knowledge, insight and understanding of the customer and market:

Do you understand their potential?
Is there sufficient margin for added value within the value chain?
Will working together deliver enhanced value to the relationship?

If the answers to the above are yes, it is time to move the relationship towards Shallow Interdependence.

This type of relationship focuses on reliability and competence when working together; it tacitly implies a long-term approach. It is where organisations work with the customer to develop trust around sensitive information areas, and explore opportunities for joint developments which can cement the relationship. These advances are evidenced through mutually agreed processes such as confidentiality and joint service agreements to ensure equitability to both parties.

A secure foundation provides a strong base to work together, reduces risks and explores mutual benefits. This includes co-creating joint solutions around value creation, knowledge sharing, technology links and joint planning.
The benefits of relationships built on trust are lower transactional costs as the need for monitoring processes and systems are reduced. Collaborative working is more efficient than going solo. Opportunities for co-creation are not only more efficient but mitigate risks.

Dr Mark Hollyoake

Mark is a co-founder and Director of Customer Attuned Ltd. He holds a Doctorate from the University ofSouthampton, his thesis focused on Trust as a dynamic within business to business customer relationships.

He is an expert in B2B Customer Experience and Customer Management. This includes CM strategy development; execution of improvement plans (incl. organisational modelling for customer management); programme design; and partnership & alliance development.

Mark's applied work across FMCG, industrials, medical devices, financial services, business services and construction has led to organisations making, significant improvements to their customer management. A large focus of this work has been moving organisations up the Trust Ladder to enable them to benefit from reduced cost to serve, while continuing to innovate and deliver mutual value.

Mark is a Fellow of the Chartered Institute of Marketing and Member of the Institute of Sales and Marketing Management. He holds an MBA in strategy from Henley Business School.

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