In part two of our interview with Chris Cottam, the former European Marketing Manager of HP, he speaks about how buyers select suppliers for the consideration list, and offers a rare insight into what marketers should be doing to make sure they build a lasting relationship. Chris is speaking on this topic at tomorrow evening’s S&M Forum event.

A lot of our clients are talking to us now about how they are under pressure and feel the need to get much closer to customers. What should marketers be doing now to get closer to the customer?

If you look at it across the whole spectrum of marketing activity there is undoubtedly value that marketing can bring to relationship selling, starting with the ‘go-to-market’ strategy. It’s all so easy to say ‘we’re going to sell to the FTSE 100′ because they’re all big, blue-chip household names.  I’ve seen organisations try and do that without really thinking about why those accounts would be interested in what we’ve got.  There, discipline around ‘which customers’ and ‘what portfolio’ has to be undertaken exactly as you would in a more product or transactional-based sales environment.  It’s just the criteria are different.

Thereafter, I think where we are all collectively weak these days is in delivering some of the marketing basics in a relationship environment.  For years and years, people have banged on about how the sales force needs to be armed with a really good elevator pitch, and yet I’m staggered that if you stop many sales people and ask them about an elevator pitch they understand the principal, but can they actually deliver it?.  No.

Why is that?  I think it’s because in a product environment, the product pitch to the senior buyer or board member you happen to meet, is seen as a ‘nice to have’ – a ‘what would you do if?’.  In a relationship-based situation, though, it’s much more important than that.  You may struggle to get hard appointments with people, so metaphorically hanging around in elevators may not be a bad thing to do to get yourself known.  And then it’s crucial that you know exactly what you’re going to say to them in that 30 seconds or one minute.

Ditto if do get the opportunity to meet them in a more formal environment – that first minute or two of the conversation is the most important one or two minutes that you’re going to have, because that’s going to decide, in the buyer’s mind, whether it’s worth having the relationship with you or not.

We as a marketing crew tend to send the sales people out with words of encouragement…… ‘ooh, guys, this is really important’. What we don’t do is actively give them something very concrete that we can train them on.  We train the hell out of them about the product – how fast is it, what colour is it, how fast does it go – but the basics covering the equivalent things in a relationship environment, I don’t think we do.

I don’t think we invest anything like enough time in supporting the salespeople.  I’m being very black and white here, just for brevity – not everybody is quite this bad, but when we talk to people in a relationship environment about sales enablement, the first thing people will typically respond with is ‘oh yeah, we give them lots of collateral’.

Well, great, and you need to have it, but actually in terms of the level of importance of a relationship-building exercise, collateral is fairly low down the list.  It’s on the must-have list, because eventually somebody might say, ‘have you got a brochure?’ or whatever, but fundamentally that’s not going to get you through the first five minutes.

Understanding the individuals in a client organisations – what do they like, what do they not like – is key.  A real key question in terms of what I’ll talk about at the S&M Forum tomorrow is, ‘how do you get onto a senior buyer’s consideration list?’.  This is not the decision list, this is just the ‘I’ve got a problem, who might I talk to about that?’ list.

The first person is the people they always talk to.  If you’ve got an existing relationship, it’s absolutely fantastic and it’s so hard for anybody to take that away from you.  From my experience with HP several years ago, we all charged off on the ‘we need to be more relationship-based’ angle and we didn’t have any understanding about how difficult it is to break into a senior-level relationship where they have established suppliers who they trust. It’s very, very hard to get into that space. 

Nevertheless, that’s the top level thing. And it makes sense – if you’re a top level executive, having a regular chat with someone from a consulting or a solution-provider organisation, and you say to them, ‘I’ve got this issue, could you help?’ and the answer’s ‘yes’, you probably go ahead on that basis.  You don’t want to be expanding it out to any kind of formal procurement exercise – you just want to get the job done.

Second level, if you don’t have a regular supplier, you start asking colleagues.  ‘I’ve got this issue, does anybody else have this issue? Do you know anybody who could help?’.

Third level is actually going to professional associations. Relevant to us as marketers, people are coming to The Marketing Practice event with their own issues, and over a drink they’ll say, ‘I’m having an issue with this or a challenge with that, is this something you’ve seen, is there anybody who can help me?’.  These professional bodies have or should have a far more important role to marketing in building relationship-type sales because this is where people ask the question, ‘who could sell to me? Who could help me with this problem?’.

And then fourth on the list is the independent analysts.  I know in the IT arena people are very quick to jump on the phone to IDC and Gartner and others, or at least that’s what we think they do, but in fact if somebody’s done that they’ve already exhausted all the other options, so you’re putting yourself into a very competitive space.

The point of all that is that people invest time and effort into things that are as concrete as possible.  Briefing analysts about how good you are and all the wonderful things you’ve done is a very tangible thing to do, and something you can, as a marketing organisation, reflect back into the business to say ‘look what a good job we’ve done of this and all the analysts think we’re great and they’re writing nice things about us’. 

It is important to do that, but it isn’t as important as some of the harder things about getting knowledge about individuals in the business.

Ultimately the concern should be about effectiveness, which by its very nature is hard to put metrics against. But there is also, especially in today’s climate where budgets are being squeezed, this need to justify activity to the rest of the organisation.  And I think that tends to push marketing organisations down the ‘I need to do something very tangible so that I can demonstrate how busy we’ve been’ route. 

So they tend to select those as higher priorities items than they should be if you were looking purely at how to effectively develop business.

How do you think the downturn is affecting all of this, both from the buyer’s psychology point of view and from a buying habits point of view?

At tomorrow’s event I’m going to touch on this split between the transactional- or product-business and the more value-based end or relationship or solution end.  I think it’s generally accepted, from an economic perspective, that when things are tough, the focus moves more to only delivering essential transactional procurements, and that major board-driven programmes tend to go on the back burner.  The world becomes much more short term-focused, much more operationally-focused and much more margin-focused. Anything which is not going to have a short term positive impact on improving margin, tends to go on the back burner.  Not shelved, because it’s probably still a good idea but it’s of lower importance.

The one exception in my experience is significant merger and acquisition activity.  And the reason given by some of the senior folks I’ve worked with is that you know if you’re about to make a serious acquisition – and serious probably means it’s going to add 20% either to your workforce or to your revenue line – it’s going to be a big change and it’s going to have a significant impact.  And that impact will likely be negative for a period of time.  So if you know you’re going to be putting out results which are probably not as positive as people have become used to, there is no better time to do that than in the middle of an economic downturn where everybody is expecting reduced or unpredictable results anyway.  The general rule about things becoming more transactional-focused, more short term-focused is true, with the exception of any significant M&A activity.

In terms of how does that work with the buyers, clearly the buyers in the transactional space are going to be under even more pressure than normal to justify things.  It’s foolish, I think, for a marketing organisation to try and pretend that that’s not the world the buyer is in.  We need to, just like you shadow people and mirror them in the sales process, from the buying side you need to be doing exactly the same things, and put more emphasis on the cost validation of whatever it is you’re proposing, because that is going to help the buyer side justify this back inside their own organisation.  That, I think, should be a bigger percentage of the proposal or proposition, than it would be in the normal times or the good times.

I think on the relationship side, and this is really difficult, if the capital budget gets put on hold and the big projects and the big programmes that you were hoping to do with the clients are no longer available, then the selling part of the business has an issue.  How can you invest time in a client who isn’t going to buy anything?

When times are hard I would argue strongly that this is the time that you need to really double down on building those relationships and the marketing organisation should be looking at things that can be done almost in the absence of regular and intense sales contact, that’s going to help build that relationship and elements of trust for two reasons really: one is that the competition might have stopped calling on the basis that there’s no business in the short term, and the second thing is that all of these capital-based programmes will go forward as soon as things turn around.

If you invest in relationships when things are not good, I think that sends a very strong message to the client that actually this is someone who cares about me, they want a real relationship, they’re not only going to be here when things are good, they’re going to be here when things are not so good and they understand my current position.  It is hard to think of a better example of building trust than that.