Building Business Relationships

Are you struggling to create and keep profitable customers? Columns for Sales and Marketing Management who wants to build business relationships.
Monday, July 07, 2003

Executive salaries and employee relationships

Disclaimer: I might be a little bias in commenting on this story, most of my peers, clients, and friends are senior executives -- many of them earn every penny of compensation at least twice over, they deserve what they earn.

(Continue ... Executive Salaries And Employee Relationships)

Minding performance measures against objectives

How often does your company review reported data to measure performance? How often does your company review reported data to measure performance?
Source: Survey of 300 IT professionals directly involved with application performance and integrity tools and practices, Newport Group Inc., July 2002 (*REsponse only in 1999.)

Do sudden changes in customer order rates or ad responses push up red flags in your company?  They should. By tracking trend information in your business, you can prevent surprises caused by various events like:

This is just a sample of some of the external changes that can effect your business. Things you wouldn't notice unless you're regularly monitoring "key success measures" in your business against objectives.

It is important to watch performance measures, but even more important to review them against business objectives.  You may want sales volume to go down as long as profitability is going up -- looking at either measure on it's own could lead to the wrong business decision.

In building business relationships, you must understand the relationship between desired action, related measure, and desired outcome. Certain information will provide insights in where your company stands in meeting these objectives. It is your responsibility to develop the right analytical measures for monitoring these points in your business.

Here are several tips to monitor performance measures against business objectives:

  1. Clearly define business objectives.  A business basic, but often missed, clearly defining business objectives so everyone involved understands the desired end result. In addition, by defining all aspects of the objectives, you can uncover challenges that may limit its achievement.
  2. Invite participation that produces buy-in. The only goals that can be meet are the ones embraced by those involved in their achievement. Get feedback from each individual who will perform the actions required to reach the objective -- the more input they have the greater the buy-in.
  3. Be clear about responsible parties.  When business objectives are defined, make the individuals involved in the definitions responsible for specific results. Before moving toward any objective, make it clear to all involved who is responsible for getting you to that point. This reduces confusion and finger pointing.
  4. Use common measures of each objective.  In every part of your company performance measures must be calculated the same way. Nothing frustrates employees more than when one group calculates X different than how their last group calculated it. Standardize each formula used in performance measures.
  5. Centralize information collection.  While local reporting is helpful in the decision making process, todays technology allows information to be quickly compiled in a central location. Each data element can then be reviewed against trends and overall reduce your data mining costs.
  6. Use dashboard technology to simplify analysis.  Try Making data useful to all involved by consolidating relevant information on simple screens or wall charts. Make it easy for everyone in the company (or a functional group) to monitor changes in performance measures.
  7. Automate collection to eliminate fudge.  It's true in all businesses, some managers manipulate numbers to their advantage if they are given the opportunity to do so. Use automated systems to calculate performance measures, even consider collecting this data through process instead of human interaction. Measures are analytical not objective.
  8. Focus each team on results they control.  It is better to measure a team on factors they can influence, you'll get greater buy-in and better results. Group teams together to influence department measures, and departments to influence corporate objectives. When each party works locally it's easier to understand how daily action creates success.
  9. Define reasonable periods of measure.  Depending on your organization you may need to review performance measures against business objectives only a few times a year. Select a period of measure that works best for your company -- if your period is too small, it will be hard to spot trends, too long and you might miss opportunities to correct bad situations.

Justin Hitt helps executive build stronger relationships that can increase profits and create loyal customers. For more information visit Inside Strategic Relations or call +1 (877) 207-3798

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Is this how you treat your customers

Emo Phillips. "At my lemonade stand I used to give the first glass away free and charge five dollars for the second glass. The refill contained the antidote." [Quotes of the Day]

Is this how you treat customers who buy your products?  You would (maybe you wouldn't) be surprised how many large companies sell inferior products, just so you have to buy the fix. Think about the software industry.

In the commercial software industry people often buy products that are only usable if they buy more memory, or even the upgrade a few months after the purchase. It's like the disappointment your children would feel receiving holiday gifts without the necessary batteries to operate them. While this generates great profit for your business and its partners, it's bad for the customer relationship.

How do you avoid this type of annoyance?

Justin Hitt teaches executives strategies to improve business relationships that can increase revenues while reducing costs of service. Publisher of Inside Strategic Relations, a twice-monthly newsletter.

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A temporary workforce isn't a loyal one

Hiring on the Fly. Northrop rationalizes spending on contingent work force. [Technology News from eWEEK and Ziff Davis]

While software allows us the ability to manage humans as just-in-time components of our overall business system, How are we to build a strong and loyal workforce if everyone is disposable?

(Continue ... A Temporary Workforce Isn't A Loyal One)

Learning from unexpected challenges

It has been a wonderful holiday, my computer made me take some time off by crashing Friday morning. Fortunately I only lost the root disk, a couple megs of notes, my book marks, and had to reinstall most of my software. But what about customer requests over from the 4th till 7th of July.

Fortunately it was a US holiday weekend and many people were away from their offices, however, imagine what would happen if such an unexpected change happened to your business. Contingency planning is a big part of excellent customer service and building the business relationship.

Customers don't want to hear your computer is down. When your mistakes (or those unexpected things like computer systems failing) cost customers money, you may be liable for the damages. Add expense to injury and costs compound.

Here are a few preventative measures to improve availability of relationship building tools:

  1. Keep things simple.  Could you recover your daily operations over the weekend if you lost a significant part of your infrastructure today?  Document any practices that deviate from industry standard practices -- and train your people on both.
  2. Identify critical processes.  Those core processes that generate revenue and provide the value customers expect should never be interrupted, and when they are -- these processes must come on-line first. What is it that you do that your business can't live without?
  3. Always have a plan B.  In the business world, your plan B is a backup plan to engage when your original plans hit unexpected snags. Create this plan as a contingency while you address any other issues in your company. Back up plans get you back to a point prior to the challenge with the minimal amount of energy.
  4. Carry the right insurance.  While this is a business basic, certain insurance policies will cover damages (physical or fiscal) when your failures cause discomfort for your customers. Insurance can also be as simple as pre-planning. Do you have a plan in the face of unexpected changes?
  5. Stay calm in action.  Don't panic, just get started with those actions you know that will resolve the issue at hand. As in any emergency situation, how you handle the crisis significantly influences the outcome. How do your customers expect you to handle the unexpected?

By taking certain preventative measures you can save yourself time and money, more importantly you can save face in business relationships. Your customers will see you care about your ability to serve them, by being ready for common problems that all businesses face. After all, no one wants to hear "Can't help you right now, the computers are down."

Justin Hitt helps executive build stronger relationships that can increase profits and create loyal customers. For more information visit Inside Strategic Relations or call +1 (877) 207-3798

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