Content Copyright © 2006 Bloor. All Rights Reserved.
I have been struck recently with the current gulf between what
customers want and what suppliers want to sell them.
For example, I was chatting to a top European retailer whose
suppliers include SAS, Business Objects, and Oracle. “None
will give me the on-site demonstration and Proof of Concept I want.
They only want to show me PowerPoints” he moaned. This
retailer has formed a relationship with a small start-up (Netezza)
whom they cannot praise highly enough for their commitment to
customer service and customer satisfaction.
Maybe customer accounts are perhaps not quite as
“captive” as suppliers would like to think they are. In
the CPM market FTSE 500 companies like Rexam Paper, GUS and WPP
have recently switched alliances towards smaller vendors.
Too many vendors still believe that product superiority is the
way to customers’ hearts. This is a hangover from when demand
outstripped supply and technologies were different and interesting.
Suppliers just needed to employ more salespeople in order to sell
Nowadays the market is crowded with vendors offering products
that look incredibly similar in the customer’s eyes. Technology
advantages are easy to copy and last nano-seconds, and customers
know it. Gone are the days when the salesperson held all the aces,
and customers had to beg for a quote. Oracle publishes its prices
on its web site for God’s sake!
In recent research by ITSMA, 64% of IT services companies said
that Marketing’s greatest impact is in “differentiating and
positioning the company”. Most suppliers in the past would
have said their salespeople do this, so some are sensing the new
dawn. Marketing should be the custodian of customer-centricity and
customer loyalty and coloured pens and brochures should only be one
small part of their job. The sales organisation should have the
highly-skilled job of executing on the value proposition and brand
promise delivered by marketing.
What customers want is more interest taken in the
“soft” elements of supplier relationships. They want to
be looked after and want to be treated with a little more respect.
They want service and for suppliers to go the extra mile for them;
they want pricing based on value for money, and they want
expertise, professionalism, and transparency without the
To thrive in this environment vendors need to adopt a strategy
of customer intimacy in order to in-build customer loyalty, which
will pay dividends many times over in the longer term. And
incidentally it will make your company a hell of a lot nicer place
to work in—good people and their knowledge will be retained,
and good people from outside the company will want to work for
Customer intimacy is not only about reducing the number of
customer accounts your sales executives have, but also it takes
customer needs seriously in every touch point. That is in sales,
marketing, professional services, customer services, accounts
receivable—in fact in every person in your organisation. SAS
is perhaps the closest to achieving this goal in the BI/CPM space,
but even they have room for improvement, as shown by the above
Vendors are talking about Software 2.0 i.e. the new paradigm of
web-based integrated applications that are available as a service.
Those whose business models remain stuck in the old paradigm of
‘sell a big licence, take the consulting revenues and enjoy a
5 year maintenance revenue annuity stream’ will struggle. For
those that marry up this new technology with a well-executed
customer intimacy strategy, expect your customer satisfaction,
Earnings Per Share and shareholder value to grow dramatically.