Insights

Stand By Me

Recently, I participated in a conference attended primarily by technology integrators, firms that provided high-end solutions to complex challenges faced by their customers in business and government. Their firms were staffed by experienced professionals skilled in networking, software, and various applications, and the customers they served were mostly Fortune 1000 businesses and similarly-sized government agencies and not-for-profit organizations in fields like education and health care.

Each of these integrators worked with a variety of technology providers, the large well-known firms that produce various hardware, telecommunications, and software platforms that the integrators brought into the solutions they delivered to their customers. As such, the integrators are key customers for those technology providers.

My presentation to this group of integrators had focused on the importance of developing strong, sustained relationships with their own customers in industry and government. I offered recommendations based upon insights as to what customers consider to be the best practice behaviors of business suppliers. Over dinner, one of the integrators at the table turned the telescope in the other direction, and asked what the group felt were the characteristics of their best technology providers. He framed the question as follows: “Last week, a competitor to [one of his technology providers] came to me and tried to convert me to their product, offering a deal that was a few percentage points better than what I’m getting today. From what I know, the two firms are about equal in terms of product quality, breadth, and other factors. So what I’m asking myself is ‘Do I remain loyal to my current provider, or do I take the money and run?’”

This sparked a spirited discussion among the integrators. The first conclusion that was reached was that loyalty in business markets such as the one in which they participated wasn’t driven by economics. Two comments summed up the discussion leading to that conclusion quite well. One integrator said “Our suppliers are always going to be competing on price, always offering a slightly-better deal, always willing to make us whole if there are costs of converting. We always have to look out for ourselves and our own customers in terms of getting good economic terms, but that’s not the reason for picking one provider over another.” Another participant in the discussion said “We’re not like the individual that is one or two flights short of getting Gold status with all the upgrades. Whether we fly first class or coach depends on how well our businesses are doing, not on points earned by repeat buying.”

The group went on to discuss what did in fact establish a feeling of loyalty to a technology provider. The examples they gave were best synthesized by a slight variation on the lyrics to Stand By Me, the song popularized by Ben E. King, The Temptations, John Lennon, and many others: “Whenever I’m in trouble, won’t you stand by me?”

Over the course of the discussion, the integrators shared with each other over a half dozen examples of contributions that had been made to their firms by technology providers that had generated a sense of loyalty to those organizations. Only one of those examples had a hard economic element to it, with that one example being a firm that was helped to get bank credit by a large technology provider during the tough times of 2009. All of the other examples involved technology providers that had stood by their integrator partners during challenging times.

One extreme example that was shared involved a situation when, in the midst of a large and complex project, a majority of the project team members resigned to start their own firm. Because of the specialized skill sets involved, the integrator managing the project knew they couldn’t re-staff in a timely enough fashion to ensure success on the project. To their surprise, one of the technology providers with which they were working came to the rescue, deploying a team of strong engineers onto the integrator’s project team. The project was completed successfully, the technology integrator rebuilt his staff, and, in the words of the president of that company, “I learned what a real partner was like”. He went on to say that no competitor could possibly ever convert them from this relationship regardless of the incentives that they offered. “We’re loyal for life.”

A second case study was provided by an integrator that had faced a declining market, one where the trends facing that firm pointed more towards extinction than towards continued operations. He reported that one of his technology providers came to them, explained that they recognized the situation, and offered to extend the relationship into a new vertical market where growth prospects were much stronger. This executive provided the following observation: “This just blew my socks off. We weren’t in any way an obvious choice for this, as there were other firms in our region already in that market. And there was no legal reason why they couldn’t have gone to one of those other firms. But [the technology provider] said we’d been a great partner, and they wanted the relationship to continue. And they put their money where their mouth was, investing in helping us to get up to speed and collaborating with us – actually leading us – as we got going in the new segment.” He went on to conclude “That’s my definition of loyalty. They were loyal to us. We’re going to be very loyal to them.”

These case histories reinforce a conclusion that emerges time and time again in business markets. While economics – pricing, incentives, rebates, etc. – always matter in business relationships, the actions that create strong positive feelings by customers about their suppliers are those that are associated with overcoming difficult challenges or getting ahead of important opportunities. Creating the success stories that trigger the level of loyalty reflected in the examples provided by the technology integrators who shared the experiences described above takes hard work and a commitment to your customer that is reflected not only in day-to-day interactions, but especially in situations when “the night has come and the land is dark”. If you want loyalty from your key business customers, look for opportunities to show that you can be counted upon to stand with them.

Author: George F. Brown, Jr.

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