Tuesday, April 23, 2013

Relationship Portfolios: B2B, B2C, and C2B


I was reading an article about managing a relationship with difficult suppliers, and stumbled across a bit of advice that I think applies to many relationships, and particularly the convoluted mess that has been made of social media by the commercial sector.

The advice to business was that most organizations have hundreds of suppliers and it is clearly not possible to develop close relationships with each and every one of them.  As such, a business should attempt to classify its suppliers to identify a "manageable portfolio" of key business relationships based on two criteria:

  1. What is their value to you?   You have many suppliers, but some are more critical than others.  You do not need to develop a close relationship with your office supplies vendor, but you should seek to closely collaborate with the firm that provides components of your own product.
  2. What is your value to them?   Not all suppliers will want to invest the time and effort into developing a relationship to your firm.   They may be a critically important vendor to you, buy you might be a small account to them, and they will not have sufficient interest in sustaining a relationship.  Chasing after them is not a productive use of your time.

Based on those outcomes, it should be possible to spend your time interacting with vendors more wisely and productively, and to reevaluate your relationship with certain vendors: namely, if a vendor is more important to you than you are to them, find a different vendor (and in this sense, dealing with a smaller firm for whom you are a prized client may be more productive than dealing with a large firm who considers you to be far less important than their major accounts).

This advice is immediately applicable to the common consumer, who purchases many things and many brands, and doesn't wish to involve a great deal of time and effort maintaining a relationship with every single vendor.   Particularly in the present age of social media, brands are eager to become more intimately connected to their customers, and some customers seem to be indiscriminate in accepting and nurturing relationships with brands that do not matter much to them (which in turn gives the brands themselves a false indication of their importance).

It occurred to me immediately that businesses would be well served by taking the same approach to their own customers: recognize that some customers are more valuable to you than others, in that they provide the greatest profit, but that your most valuable customers may not consider you to be a significant supplier in terms of their total purchasing budget, and pursuing a relationship with them would be a waste of resources.

My sense is that this is one of the primary causes of social media clutter we see today: brands are indiscriminate in chasing after customers, and make unfocused and general efforts to connect with as many people as possible, instead of focusing on their most valuable customers (and those who want to connect), and the result of trying to appeal to everyone ends up in a sloppy and inconsistent message that appeals to no-one.

I don't have the sense that customers have quite so much of a problem: people who indiscriminately "like" brands are deluged with promotions and image marketing clips that are of no interest, and generally learn to trim their list of friends to the brands that matter most.   The problem became so prevalent that Facebook relegated business to a separate feed, which I strongly expect few people ever check.

So perhaps the question becomes, is it too late to even consider a more moderate and focused approach to interacting with customers via social media - or has the well already been poisoned?

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