A smart match means understanding your customer's business and their customers' business

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A smart match means understanding your customer's business and their customers' business

For suppliers of industrial investment goods, understanding the customer’s business and the business of their customers is essential, as it proves that you understand the customers’processes and therefore know how to best produce value for them,” says Dr. Christian Grönroos, Professor of Service and Relationship Marketing at Hanken School of Economics in Finland.

These days, many global companies selling investment goods are facing challenges as they are expanding into the markets of new, developing areas, known as “high-context cultures”. “The most important factor in these new markets is to start by creating a solid, trusting relationship between yourself and your potential customer. This is done by making acquaintances on an individual level and interacting to build up the confidence of both parties towards each other,” Grönroos says. “No trade is likely to take place if you are strangers.” For Finns, interaction on a personal level is not always easy, as we live in a culture, where people are used to getting to the point quickly without too much small talk. “It is essential to realize that it takes time to build a relationship,” explains Grönroos. “It may require two or three meetings before you get to talking about the deal itself. Especially in developing areas, I would also be careful with non-personal communication channels such as video conferences at the beginning, as they do not efficiently enhance interpersonal relationships and trust.” Understanding the customer chain In addition to creating a trusting relationship through personal interaction, it is vital to understand the customer’s business and the business of their customers and so on down the customer chain. “If you do not know enough about the business of your customer’s customers along the chain, you cannot in your discussions with the customer prove that you understand their processes and how they can be facilitated in a value-creating way,” notes Grönroos. “If you do understand your customer’s business and the trade of their customers, you can demonstrate how you, in the role of supplier, can support the customer’s processes and operations and, in this way, enable better business performance for them. Further, if you can translate this knowledge and understanding into cash or a calculation of the monetary implications of your support, this is even more valuable for all parties in the customer chain. It also helps sales to be more oriented towards offering customer value instead of price only. This is something often missing in customer relationships, that you go on to calculate the value of, for example, reliability of deliveries or service operations, or supporting customers in finding new markets and customers. For this you need in-depth information from the customer, otherwise you can only provide guidelines.” The importance of continued communication throughout the life-cycle Grönroos continues by explaining how, in a long-term customer relationship, all levels of cooperation should function faultlessly. “This entails invoicing, reclamations, service, schedules, quality, and understanding messages and other correspondence as it was meant. Not only is the delivery itself of importance, but also every negotiation and discussion. If an error should occur, it is especially important to handle these situations with skill, displaying good will. The communication link between people in both companies must work perfectly between all involved.” According to Grönroos, this means maintaining communication between different management levels even after the deal has been closed, so the customer does not feel forgotten or neglected, and confidence is sustained. It is a common trap to assume that after the deal is closed, you can maintain contact purely through sales or occasionally the top management. Although the handling of the delivery itself is important, maintaining communication on a broad basis is essential for keeping the customer long term. If something goes wrong with the installation or start-up of the delivered machinery, for example, you should remember to keep in contact with all interest groups, so that they do not feel neglected. Even when nothing concrete is happening, you keep in contact with the customer and create a subjective experience that strengthens the relationship. Synchronizing operations to create value Says Grönroos: “When you have reached a trusting relationship, you can start matching the operations and functions of both parties to see if there are common benefits to be found. These may include checking how the delivery is installed and completed at the customer’s end: are the processes as smooth as possible? What factors are of greatest importance for maximum efficiency?” Questions such as these are not discussed with strangers, but if the relationship is one of mutual trust, it will only grow stronger when the customer realizes that you want to want create added value for their company. “Already in sales the discussions should concentrate on the value you can enable for your customer rather than on the price of the products or services. How can we support our customer in making their entire production process as profitable as possible? How can we use our know-how to assist customers to make such changes to their operations that will best serve the requirements of end customers in the future?” This is also a way of motivating a price tag on the service components of the offering. The future When every aspect of your cooperation works in harmony, the entire customer relationship becomes a service to the customer. We can support their business processes and so have an influence on how the company relates to its suppliers on a strategic level. When this is the case, you will get new insight into how to develop your offering to the customer. The products you supply are only part of the long-term service you provide to the customer. Dr. Christian Grönroos is a leading scholar in the areas of relationship marketing and customer relationship management. He is also considered a pioneer in modern service marketing and service logic. Since 1999, Dr. Grönroos has been Professor of Service and Relationship Marketing at Hanken School of Economics Finland (Svenska Handelshögskolan). He is a chairman of the board of the research and knowledge centre CERS, Centre for Relationship Marketing and Service Management of this business university. Dr. Grönroos is an Honorary Professor at Nankai University and Tianjin Normal University, P.R. China as well as Oslo School ofManagement, Norway. In 2001-2007 Dr. Grönroos served as a Guest Professor of Service Management at Lund University (Campus Helsingborg), Sweden. Dr. Grönroos has been selected as a“Legend in Marketing” as a first outside North America. His research will be compiled and featured in the forthcoming “Legends in Marketing” series, edited by Dr. JagdishSheth (published by Sage Publications). The Legend series aims toensure that the work of the most prominent marketing scholars is widely disseminated to the next generation of marketing researchers.

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