Supplier relationship marketing for marketing services
Working with external providers is as important to the contemporary sales and marketing organisation as it is to any other aspect of business. Yet this is an area where solutions that optimise the effectiveness of how the organisation and suppliers work together are far and few between. It is ripe for improvement.'
Background to SRM
Partnerships and alliances are key to any business. Companies are constantly looking for ways to simplify and optimise their supply chains.
A web search for 'supplier relationship management' brings up a forest of articles on the subject from global software companies, consultancies and research organisations. The large majority, however, concern themselves with supply chain management relating to delivery of products or services, driving costs down through negotiation and self-service, and developing win-win supplier strategies. There are a large number of solutions and approaches that cover this ground, and provide well-documented benefits by improving upon the way things are done.
These objectives are well summarised by this extract from Computer Weekly (22nd November 2000):
'Users are increasingly turning to SRM products to rank and rate their supplier bases, match business objectives with individual suppliers' performances, identify their best suppliers, understand and reduce procurement spend, predict optimal procurement strategies across traditional and e-channels and build strategic and profitable supplier relationships.
Depending on the size of the firm, savings that stem from knowing more about suppliers before signing or renewing a contract are usually in the range of 5% to 15% of an organisation's total purchases. This can easily translate into millions of pounds.'
The sales & marketing supply chain challenge
Working with external providers is as important to the contemporary sales and marketing organisation as it is to any other aspect of business. Yet this is an area where solutions that optimise the effectiveness of how the organisation and suppliers work together are far and few between. It is ripe for improvement.
Given the extent to which marketing campaigns, target qualification and lead generation activities are entirely database dependent, data-driven marketing suppliers are increasingly crucial to the success of these kind of initiatives. These suppliers will include telemarketing and research organisations, data processing bureaux, data-driven agencies and fulfilment operations.
Market Developer's approach to Supplier Relationship Management is different. For a start, we provide a methodology and tools to enable sales and marketing organisations to work effectively with their suppliers to improve the impact and useability of the outcomes they achieve.
The solution focuses on actionable results, followed up in 'real time', and instantly measurable. It is low cost, easy to implement, and results are immediate and measurable.
Consequently, it is a viable approach for larger enterprises, as well as medium sized and smaller organisations, which arguably have just as much, if not a greater need, for external specialist assistance.
Rather than start from the premise that we should aim solely to improve the way things are done incrementally, we provide a means to change the nature of collaboration between organisations and their suppliers, enabled through the use of a common database platform, accessible to all over the web, via application specific interfaces that are 'fit for purpose', easy to use, and secure.
Current scenario
To understand what this means in more detail, we will start by examining a common existing marketing and sales scenario:
Kicking the typical process off, customer databases are mined (by marketing executives or database administrators and managers within the organisation) to select the appropriate audience for a given activity, are usually verified, before then being extracted, ready to be used by themselves or their suppliers.
The data extract is provided to the supplier company, ahead of the project start point. Commonly, sales and marketing suppliers work off their own database applications, which are easy for them, because they can support and make changes in-house, and it ensures all their work conforms to a standard process. The supplier reviews the data extract, makes any format or structural changes necessary to use the data within their own systems, and loads it in.
The supplier then undertakes and completes the project, either feeding back results on a regular basis or at the end of the project, depending on the time sensitivity of the undertaking.
The organisation may or may not have considered what additional fields within their customer/ sales database need to be created to accommodate the incoming data. This is the first consideration when seeking to upload data that contains the results of the supplier activity.
The second is to determine whether changes have been made to records within the organisation's customer database during the period of time that the supplier has also worked on the same records, and whether loading the supplier output will cause recent changes to be erased. Rules need to be created to ensure that merging records back together again are done accurately, and ensure the integrity of information is safeguarded.
When it comes to business data, applying changes within an incoming file to the organisation's database at site/ establishment level almost certainly needs to be handled specifically, as a result of the likelihood of other contacts at the same address residing within the database. If you are not careful, there is a risk of moving multiple contacts that should not be moved, and introducing fundamental errors into the consolidated customer database.
Because data 're-loading' can take time to get right, organisations that receive results from suppliers often allocate follow ups to front line staff in spreadsheets or via email, so that they can meet their service and sales standards, and get value out of the work undertaken externally.
This creates a crucial break in the information flow that can be analysed within the organisation's customer database/ sales systems, and means that it is difficult or impossible to calculate the effect of campaigns or initiatives. Results commonly get hidden within the overall sales and marketing activity levels, and there is no guarantee that sales will be coded by source of lead or project.
The affect of this kind of process is that campaigns and lead generation initiatives take up far too much time within the marketing organisation. Not only that, as time elapses the effectiveness of results are diluted in terms of using them to win sales and grow customer revenues.
If you were to analyse what proportion of a marketing manager's time is spent liasing internally with Information Services in relation to incoming data, and with external suppliers to manage the process of transference back of information, how much time would you imagine this consumes? Example cases from publishing, pharmaceutical, agriculture and Information Technology sectors suggest that as much of 40% of the time might be spent on process-related issues.
When consultants talk about the problem of multiple databases environments - where difference databases across the company that house islands of information - they routinely exclude or ignore external suppliers' databases containing a subset of the organisation's customer information, however temporary they may be. Yet these are just as important to consider, because of the issues covered within this paper that lead to poor business process issues and under-performance.
Figure 1 illustrates the typical fragmented data landscape, encompassing information held within supplier databases as well as internal databases.
Fig 1
Back to White Papers