New Year’s resolution: Time to get closer to your customers?

By | January 5, 2010

meetingThere could be good news about the recession. There is growing evidence, both from the respected ACCA global survey (www.accaglobal.com) and recent O2 small business survey (http://bit.ly/6UGCZs), that business confidence is increasing. From the ACCA Q4/09 survey (http://bit.ly/4tyUZH) there is even optimism that Q3/09 was the bottom of the downturn. Although, we may still have a year left before recovery is really underway. O2’s survey shows 27% of small business is healthier now than this time last year and 59% are predicting better business performance in 2010. However, economic recovery and low consumer confidence remain key concerns. According to ACCA, last year the two big issues for small firms were falling customer demand and accessing finance (http://bit.ly/5ZoFeB). The government and banks continue to make reassuring noises about the latter but what can they really do about increasing customer demand?

But some small firms have already been reporting growth in sales and profits:
 

Thunderhead, which helps companies to integrate marketing to their communications with customers through automation, saw sales grow by 28% to £16m and Pre-tax profits by 47% to £2.9m (www.thunderhead.com). For details of the top 50 growing companies see Growing Business Magazine (http://bit.ly/7EtnhL)

Deliver Net, a specialist supplier to the community healthcare sector (www.healthcare.co.uk). Managing director Tim Lockett said, “We have seen our business grow in the last two years but it’s been hard work. We have spent as much time on finding efficiencies and reducing costs as we have on developing new business.” And the key to reducing costs and increasing sales? “E-commerce has been critical to both. We have supported our customers in moving their ordering online by bespoke product templates and budget control systems. In the end, they see the saving to themselves rather than us. We now receive over 70% of our orders online.” He added, “The number of customer service staff is down but warehouse and distribution numbers are up. We still employ the same number of people but process more orders.” And what about the future? “I’m optimistic. There are new customers in the pipeline and we can see new markets opening up. In the last year we have had to get better at what we do. This increased efficiency hasn’t gone unnoticed by our strategic partners. Yes, I’m hoping 2010 will be a good year.”

Vickers Laboratories, which has been manufacturing chemicals for over thirty years (www.viclabs.co.uk). CEO Julian Driver said, “Sales haven’t grown. But more importantly, we’ve been able to maintain profit margins and keep cashflow under control.” How has this been achieved in a recession? “Innovation has been at the heart of what we do. Most of these have been incremental but when you add them all up we have come a long way. We’re almost invisible! We have become embedded in our customers’ supply chains and add value to their service offering, which makes it counterproductive to move from us and if cash is tight we still get paid.” And what about the future? “Our markets are deliberately diverse and we are constantly looking for new business that is difficult!” Why? “Well, we are really a solutions company. Not chemical ones – we solve problems and that draws on our knowledge to health and safety and experience of reagents. And this protects our margins. So I’m quietly confident about 2010, even though I know new business is going to be difficult to find.”

What do they all have in common? In the end, they are all focused on process innovation. They appear to anticipate their customers’ needs. And the key to this? Get close to your customer. Or in the words of Mrs Wilson, the housekeeper (Helen Mirren) in Robert Altmans’ Gosford Park (2001), “What gift do you think a good servant has that separates them from the others? It’s the gift of anticipation. And I’m a good servant. I’m better than good. I’m the best. I’m the perfect servant. I know when they’ll be hungry – and the food is ready. I know when they’ll be tired – and the bed is turned down. I know it before they know it themselves.”

So perhaps 2010 is the year in which to get so close to your customers that you can anticipate their needs before they do – well at least before your competitors do!

About Nigel Lockett

Nigel is a senior academic, experienced manager, entrepreneur and community leader. He has previously worked as a senior lecturer at Brunel University Business School, business development manager at InfoLab21 and relationship manager and lecturer at Lancaster University Management School. Nigel also has more than 20 years' experience as a company director, with a track record in managing start-up, joint venture and social enterprises. He has successfully designed and delivered innovative programmes in entrepreneurship, innovation, strategy, e-business and technology enterprise and was the founding director of an MSc in e-business and innovation.

Specialties
+ Entrepreneurship
+ Innovation management
+ Universities in open innovation
+ E-business