Partnering with your Customers

[Article placed on website: June 2004]

The telecoms industry is used to partnering. Whether it be as part of a "strategic alliance", providing a key solution set to a systems integrator, marketing products through distributors or simple reselling, the players in the industry have long recognised that today it is practically impossible for a single company to provide complete solutions i.e. directly selling, installing and supporting its own products. And few companies try to do it.

But a fairly recent development is taking the idea of partnering in a new direction.

We have mentioned elsewhere in these articles about the need to treat your partners like your customers. Now some far-sighted companies have realised that they need to treat their customers like partners!

There is a generic problem in the telecoms industry. Technology advances have enabled new services to be delivered to end customers that are faster, more feature-rich and (if the service providers choose to make them) cheaper than existing services. But the awareness of the end customer – both business and consumer – is lagging the capability of the industry to deliver.

The industry is also just emerging from a three-year downturn, sparked by the "dot com" crisis. Companies – both suppliers and service providers – have cut back on staff numbers and cut costs. This is a leaner, meaner industry than it was three years ago. But as a consequence, a great deal of expertise, particularly sales and marketing expertise, has left the industry, and it will take a while for that capability to be built up again.

So we have suppliers with brand new products incorporating the latest technology, that service providers will buy provided there is a demand for the services that these products enable. But the service providers are taking too long (in the suppliers' eyes) to stimulate the market. The end customer demand is a lot lower than the suppliers would like.

The traditional approach in this type of situation is for suppliers to market directly to the end customers. We have seen a great deal of this in the 3G mobile market, where handset vendors have been illustrating innovative new ways to use 3G services.

But now a few canny telecoms vendors have decided to invest some of their marketing effort towards the service providers themselves. "If the service providers are not growing the market fast enough, let's help them" is their argument. Let's put into the hands of their salespeople the same type of sales support materials, vendor support and channel management as we provide to our major distributors.

And early signs are that the service providers are welcoming this move. In a highly competitive market, with limited resources and a shortage of marketing and selling skills, they see this as a positive development. If the vendors get this right – i.e. they do all the things that would make a "normal" distributor relationship successful – then everyone should benefit: suppliers, service providers and end customers.

It will be interesting to see whether this is a short-term solution to a particular problem, or whether it "catches on" to become a permanent feature of the industry. Nowadays many telecoms service providers are owned by financial institutions that see the opportunity to make money from owning a licence. They do not have the traditional industry background of the ex-public telecoms operators, nor do they see the need to buy this in or develop it to any great extent. If help is at hand from the solution vendors, who increasingly view the service providers as a route-to-market, then there will be even less reason to build up extensive marketing and selling capability.

It is early days, but one can imagine that applying the principles learned from managing "traditional" partners like distributors and resellers will be a good idea. So if your organisation could see value in treating your customers as partners, as another "route-to-market" to the people who actually use the functions or services enabled by your products, then there will be some generic learning points that could well be applied.

Partnering Points on Partnering with your Customers

• Before inundating your customers with sales support materials, make sure your target customers are receptive to the idea of your helping them: some might view such an approach as threatening i.e. you moving in to their market.
• Set up a specialist sales team dedicated to helping customers to sell. Make sure there is a primary contact point for every one of your target customer partners.
• Think through what sort of assistance your customers will be looking for. Don't assume that your existing sales channel support material or your existing product literature will be adequate. You need to put yourself in your customers' shoes and develop sales support material that is appropriate for your customers' markets.
• If possible, work with each target customer to develop a joint marketing plan, with committed resource from both parties. Agree some key objectives and write down how and when these will be achieved.
• Ensure you have senior management support in both your and your customers' organisations for what you are doing.
• Finally, don't prevaricate. Once you have decided that partnering with your customers is worthwhile, and you have obtained the necessary management support, act fast to put your ideas into practice: otherwise you will find that a competitor has beaten you to it.

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