Not all customers are alike, are they?
They certainly aren’t! Every company has particular customers that could be considered more important or of greater potential. They are what we call ‘strategic customers’. One of the goals of strategic customer management is to help us identify them and manage them properly.
Why are these strategic customers so important?
Most companies follow the 20:80 rule, i.e., a relatively small number of customers (the 20%) provide most of the revenue (the 80%). That’s why it’s essential to manage this small group well.
So is it just a question of turnover?
We could say that a customer is strategic because of the sales volume it represents or because of its profitability. But there are other criteria too: whether the customer is prestigious and an opinion leader in the sector, its financial solvency and stability (a criterion that is very important today), or whether it has a great deal of potential...
What do you mean by potential?
Strategic customer management is all about long-term relationships. You have to look beyond the sales provided by the customer today and consider those that it will bring you tomorrow.
Do I need lots of resources or tools to manage this type of customer?
There are different planning and management programmes that can make your work easier, which help you create groups of customers based on their activity, see the business opportunities each of your salespeople are creating, etc. However, strategic customer management is more a form of working, an attitude.
You shouldn’t only think about how to meet the order you have on the table. There are two goals to strategic customer management: winning the customer’s loyalty and growing with it to build a long-term relationship based on mutual trust.
So it’s about taking selling a step further...
Exactly! There are three ways to sell: one is the commodity relationship based on the simple commercial transaction, and that’s fine for a certain type of customer. Then there is the ‘qualified provider’, that is, you give your customers added value on products and services. Finally, there is the partner relationship, which means becoming an ally who contributes value to your customer’s very structure. How? By integrating your computer system with the customer’s, studying ways that you can help cut his sales process costs, proposing joint business lines that will enable you both to reap benefits...
How do you start to build this relationship?
Each strategic customer requires a customised action plan. We have to know the customer’s objectives, needs and challenges and then set out our own goals with respect to that customer. Finally, it’s a question of deciding what to do, how to do it, when and with which resources...
Do you mean offering them new products and services?
Yes, offering them new products and services, innovations in different fields…in fact, it involves looking at how you can help your customer so you can both grow together.
All of the company’s employees must know that there are strategic customers and that they have to work with them with specific goals
I guess many of Mercabarna’s small and medium-sized enterprises must be thinking it would be hard to apply all this to their structure...
It’s true that many SMEs take the view that it’s not for them…but that’s not true! You don’t need to have a large structure or a big budget to implement strategic customer management…you just have to apply a way of working with a number of specific customers. Also, SMEs have a number of strengths when it comes to this type of strategic management.
Great! Like what?
They have a less rigid structure so they can take decisions faster and adapt much more easily to the customer’s demands at any given time.
What would you say is the most common mistake people make when managing these customers?
Sometimes actions aren’t developed beyond being one-off or isolated initiatives and that is a mistake. Strategic management must be a corporate project. All the employees must know that there are strategic customers and that they have to work with them in a particular fashion and with specific goals.
Has the financial crisis changed the way of dealing with strategic customers?
With the crisis, many businesses have understood the importance of the good management of relationships with their most important customers - particularly the need to protect and keep them in the face of the competition. Looking at it from the positive side, because companies are now more open to listening to new offers and negotiating with other possible suppliers, we can take this chance to generate more business opportunities.
What steps should we take to benefit from these new opportunities and gain more customers?
First you must be very clear about who your target public is. If you’re looking for new customers, it’s a good idea to aim well and go after the ones that could be strategic. Once you have decided on them, you have to find contacts, generate interest in this potential customer, gather lots of information about the customer so you can put together an attractive commercial proposal that adds value, constantly monitor the process, be willing to negotiate and handle obstacles...
Wow! And what if the answer is still ‘no’?
One of the things people don’t tend to do is ask why something is the way it is. There is a certain reticence, especially when it’s a customer you don’t know. But it’s very healthy knowing the reasons why a customer chooses us or not. This information can be extremely useful in future processes. If we know what the obstacle was that stopped us from winning their business, we can work on it and improve it.
In your experience, which is harder...keeping a customer you already have or winning a new one?
It has been empirically proven that it is easier to sell to a customer you already have than gain a new one. That’s why it is so important to manage your strategic customers properly and efficiently, and find out how you can sell them more products or provide new services. It’s a very common mistake to get obsessed about winning new customers and forget about growing with the ones you already have.
What tips do you have for Mercabarna businesses about how they should be managing their strategic customers?
Mercabarna businesses work in a highly competitive sector, selling products which, for their very nature or because of their price, are hard to differentiate. So in this context it is particularly important to manage strategic customers well, as a way of producing value and establishing a relationship of trust with the customer. That can make all the difference.