The Fundamental Elements of Commercial Relationships
Keep it simple, seriously! That’s my twist on the old KISS adage. As business people we do tend to lean towards complication, weaving in multiple layers of intricacy, but that doesn’t mean we are stupid. Why assume your listener is stupid? I think that’s dumb.
Seriously though, keep it simple, seriously. And you must remember this, a KISS is just a KISS, as Sam would eventually play again, the fundamental things apply as time goes by. As time goes by in your business how many of those fundamental things do you apply? Can you really KISS?
You certainly ask simple questions: Who are our top customers? How are we doing in those new regions? Are we increasing penetration of key segments? Sure sounds simple but getting those answers can be hard. Simple doesn’t mean easy. When you ask for top something, or market somewhere or type of segmentation, you better make sure everyone else knows what you mean by top, and market and type. Does your enterprise, or division, or even your department, have a common definition for any of these fundamental dimensions of your business? Does your view amount to a hill of beans in this crazy world?
If yes, then to continue to paraphrase Bogey, “This is the beginning of a beautiful relationship.” Making beautiful relationships is what your business is all about. Everyone in your business will certainly agree that they want to grow relationships, build relationships, create new relationships, mitigate the risk of some relationships, stay in compliance with the specific regulations of certain types of relationships. And if you don't have relationships, you don't have a business. If you do not understand that your business is about relationships, then I respectfully submit, you do not understand your business.
Customer, vendor, partner and prospect are the fundamental elements of commercial relationships. To systematically manage those foundational entities they need a common structure. A simple approach to applying a standard structure begins with the Four Cs as we like to call them : Code, Company, Category and Country.
Every record in a database has a code—somewhere. Once a code is put on a record—it “exists” in that database. I am coded therefore I am. You need a code to make sure it is unique. But since every system has its own set of codes you probably have more than one across your multiple workflows, departments and regions. And if you can tie them together, that is your shortest path to a single version of that relationship.
You need to know what an entity belongs to through a hierarchical structure—a parent/child family tree. Hierarchy has multiple levels, from the local branch, divisions, subsidiaries, all the way up to a global ultimate parent. Bill-to, ship-to, plan-to, sell-to are all part of hierarchy. The bigger the company, the more complicated the hierarchy. Are you selling to all the relevant divisions or branches of a given a family tree? Do you have a relationship with it already? Is it related to something that increases your risk? Are there terms you could apply because of the ownership that you wouldn’t have known about? You can’t tell unless you have a full hierarchy.
You need to know what kind of thing you are dealing with, especially if you don’t have much of a relationship with it yet. There’s a lot of granularity and nuances to categories. Types and sub-types, channels and sub-channels, genres and sub-genres. Categories define markets, enable segmentation, and are the denominator for penetration analysis. Targeting is often based on category attributes when you try to find likely prospects based on industry, segment, sub-segment or whatever.
Look at the bottom of your reports, if you dig deep enough, you’ll probably find a category you call “Other”. If you are not diligent, it could be one of your fastest growing segments. My favorite is Other/Other. We had one client who didn’t have “other” but did have a category labeled “DK.” We asked him what that stood for, he said "Don't know." So look to leverage a standardized category structure wherever possible and practical.
Following along our alliteration with Cs, you also need country and some form of geography. Where is this thing? Geography has hierarchy too—state, county, metro area, province, city, postal code. Media market, sales market, measurement market—there are many different configurations of geography depending on your use case. But agreeing on a common definition of market will clear up lots of confusion between sales, brand, finance and operations when you simply ask—How am I doing in New York or Major Metros or EMEA?
A code enables you to know a thing is unique. A company lets you know who owns it. A category lets you know what kind of thing it is. A country lets you know where it is. So if you can consistently know where something is, what kind of thing it is, who owns it and that it is truly unique and leverage those definitions with your business stakeholders, you can manage and scale your relationships across your enterprise.
Imagine how well your data would flow if you knew you only had unique records (code) that every one of them had a full and updated hierarchy (company) you had complete segmentation on everything (category), and you had consistent geographic location information (country and market). This creates a common language between departments about simple but vital elements of your business relationships. Once the data on your relationships is structured and standardized, it can harmonize and integrate better into your processes, methodologies, workflows—between your systems, regions, go-to-markets and even externally with other 3rd parties.
As you try to get a holistic view of your commercial relationships and anticipate their future needs, no matter what the future brings, as time goes, applying these fundamental things to your data will bring you much faster towards that elegant goal. The future—your future—will depend on how well you can scale your beautiful relationships. So go on, give us a KISS.