Food for thought: Developing customer intimacy

All businesses must face the prospect that each product or service, no matter how sophisticated, will sooner or later become "commoditised": bought as a generic item by customers who are interested in little beyond price and quantity and so will be largely indifferent about who supplies it.

Product modification and development is a classical means of dealing with this, to which two other means have of late received much attention. Firstly, the rise of Customer Relationship Management techniques allows the producer to match products much more closely to the specific needs of customers. By acquiring and deploying knowledge about their customers¹ organisations, they can create long-lasting relationships that will lock out the opposition. Secondly, the use of the Internet and other digital media offers new ways of accessing customers.

But these are perhaps of more interest in the B2C market; what more can be done in the B2B market?

Elevation Learning's Robert Fonteijn has an answer. "In recent years we have seen the rise of what we call the 'emergent consultancy'. These are businesses whose main product is not consultancy, but who have added consultancy to the product mix to increase competitive advantage." This enables the supplier to create greater intimacy and trust with the customer, stepping beyond being a "mere supplier" to directly address the business goals of the customer. To succeed in this the supplier organisation must acquire two key consultancy skills: the ability to analyse and understand the customer's business problems, and the ability to offer some kind of solution. Otherwise the bid to become an advisor will seem presumptuous.

"You have to show that you are worth talking to about the business," says Fonteijn. "Then you can start to discuss what is on the customer's business agenda. They may have defined their need up to a certain point, but you can take them further, adding value to the customer's business by understanding their business well and coming up with new propositions."

The diagram shows that increasing value from the supplier goes hand in hand with increasing engagement, or "customer intimacy". Even a simple service offering built around products supplied creates an ongoing relationship with the customer by adding value to what would otherwise be a one-off purchase. Now the supplier organisation can suggest ways products might be used more effectively in the business. This might involve changes to the customer's internal processes: the supplier is now in effect giving consultancy advice, and will need the skills to help the client make those enhancements. Finally, at the stage of greatest engagement, the supplier organisation is working directly towards enhancing the competitive capability of the client company. They take the initiative by making suggestions that will help develop the customer's business.

"This is also the point at which the supplier has definitively moved beyond being just a supplier, or even a consultant, but a true and long-lasting business partner," says Fonteijn. "But don't underestimate the difficulty of doing this well", he adds. Consultancy work has to be done professionally, otherwise far from advancing the relationship, it will set it back. And the sales channel has to position the offering well, otherwise it is simply seen as pre-sales activity of little value.

And - of course - this is where Elevation Learning's consultancy and training services can be of value.