Part 1 of this series focuses on building goals for 2009 around strategies that will serve your customers’ needs.
With the economic meltdown on everyone’s mind, I have decided to share some ideas for the next few months on how to survive in these tumultuous times and emerge stronger and more profitable than before the onset of the current crisis. The business climate we find ourselves in today does not lend itself to a passive mode of survival, but rather one of aggressive, proactive and creative thinking. Go back to my November column, “Is Your Glass Half Full?” and get in the mindset that you can — and will — take this year to strengthen your company and build for the future.
A couple of months ago Jim, the owner of a client company, called me with a list of options he was considering to strengthen his business. He asked what I thought was the next thing that he should do to get the most bang for the buck during these economic times. This is a good question at any time, but it is especially relevant in a time when cash is in short supply. Jim’s business was hurting and he had some good ideas on how to reverse what seemed to be an endless downward spiral. The advice I offered Jim will likewise benefit you.
First Things First
I first asked him what his most pressing issue was. He answered as many would, that it was the lack of orders. He just didn’t have the orders the company needed and was afraid of possible further declines in the future. The vast majority of companies in the industry share Jim’s concerns.
I pointed out that it was mainly the uncertainties that were his concern, and that it was customers’ decisions that would ultimately decide his own fate. The question for Jim, and you, is how well do you know your customers and the state of their business? We say that our customers come first and that sounds good, but if it is true then you should be extremely interested in their current plight and what their plans are to cope with the financial crisis. In fact, you should go a step further and find out how you can help your customers accomplish their goals for this year.
My advice is to immediately visit your top 10 customers. The owners or CEOs of both small and larger wood products companies need to put first things first and sit down, face-to-face, with the top management of their customers to share common concerns and explore opportunities for positive changes that would be beneficial to both. Please notice that I did not say the sales manager needs to go, even though you may want to take him or her along. The top executive needs to assume the lead role if this exercise is going to be meaningful.
Reveal Your Proactive Approach
There are two main reasons the owner or the CEO of your company needs to make these visits personally.
(1) The first is so that, as the decision maker at your company, you can share firsthand information that others could not in order to formulate the changes that will benefit both the customer and the company. My experience as CEO confirmed this to be one of the most effective uses of my time if done in a timely manner, and we are now in a time that is demanding such an exchange.
No one knows the future, and when there is an overriding negative perception of what the future holds, there is extreme anxiety. It is at this time that the supplier and customer should get together to better understand the other’s needs. You need to visit your customers and let them know that you want to find ways to help them reach their goals and objectives. Through discussions, you will discern what you can do to help them survive this downturn and emerge stronger. Yes, it is about them, because without your customers’ loyalty and confidence you will have little chance to survive what promises to be a long and deep recession.
The biggest roadblock to companies taking this approach is the PPFF (Price Pressure Fear Factor). Many owners and CEOs will not face customers because they do not want to be exposed to the demand for lower prices. I have a sure way to make these requests disappear forever — ignore them and your customers will go elsewhere.
A good executive can take price pressures as an opportunity to dig further in order to find ways to cut costs and/or find other issues that will mean as much or more to the customer. Although every wood products industry sector is different and each customer within will have different issues, every one of these customers can offer invaluable information that can help formulate a survival plan that will strengthen both parties in this economic valley.
The objective is to listen to your top 10 or so customers and look for common threads that run through your market and to choose those as the foundation of strategies to support your customers. You may find some on your list that are adamant about certain ideas. That’s good, because as CEO to CEO you should be able to find a solution that is good for both of you and that will strengthen your business relationship.
(2) The second reason the owner or CEO of your company needs to make these visits is to demonstrate your firm’s proactive approach to the economic climate and your genuine desire to help each customer prosper. If the top decision maker of a supplier of yours called on you with an upbeat attitude and explained that he was there to explore ways his company could help you during this extraordinarily difficult time, wouldn’t you get excited and be glad you were doing business with that supplier?
This is exactly the reaction you want from your customers. Each one of them will be impressed with your proactive approach in offering to help them through 2009 and beyond.
The purpose of this preemptive move by your top management is to build a trusted relationship where your customer truly believes you have his best interest in mind and sincerely want to help him. You are demonstrating that you are a winner and will be around after the recession — stronger than before. This is the way you build a partnership relationship that will endure while your competitors are losing customers.
You will have a loyal group that believes in you and your company and is willing to stick with you to see if you can deliver what you agreed. This leads to the critical reality that words are cheap and that it is the action that counts. Thus, if you buy into this approach and if you believe it is good for you and your customers, you must have the dedicated managers and associates in your company that will make the necessary adjustments to deliver your promises for change.
As you move forward, call the CEO from time-to-time and ask how things are progressing. Keep your sales manager informed so he or she is on the same page and is empowered to implement the strategies you agreed on with each customer. Build your goals for 2009 around the needs of your customers and rely on your team to make it happen! Your manufacturing group will be involved as well, so everyone needs to be on board as this journey begins.
Some of you may say: “This idea comes too late. Things have deteriorated too fast and it will take too long to do anything to help our customers.” My reply is simple: Better now than never. Just the fact that you are trying and are in the process will buy you some measure of time and good will.
P.S. This month I celebrate 10 years writing this column. I have enjoyed it and appreciate your support and feedback. Please e-mail me and let me know topics that interest you.
Tom Dossenbach is the president of Dossenbach Associates Inc., a Sanford, NC-based international consulting and research firm. Contact him at (919) 775-5017
or e-mail firstname.lastname@example.org. Visit his Web site at www.dossenbach.com. Past Management Matters columns are archived here.
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