On March 18, German Chancellor Angela Merkel addressed her nation in a televised speech. It was an historic event, not only because of the global pandemic she was speaking about, but also because it was the first time she had ever addressed her nation via television. She stated that the Coronavirus was the greatest challenge Germany has faced since WW2 and this statement is as true as it can be, regardless of where you live.
The challenges that face us as a society right now are unparalleled. With the stock market falling and unemployment rising, where does this leave business? Consumers are sheltering in, laying low and acting out of financial fear, not buying at the levels we would expect normally. Most consumer facing industries such as the airlines, hospitality and services are feeling this effect with severe gravity whereas in the B2B environment, it’s still too early to tell what the impact will be.
How do we survive this pandemic and what will it look like on the other side? While no one has a crystal ball, we can take important steps to safeguard our future. If there’s a lesson to be learned, it’s to be prepared and flexible.
Hold the line
As they say in war, we need to hold the line today. But in business, this doesn’t mean hold price at all costs. Instead, it’s about defining your optimal line given the current circumstances and then hold all parts accountable.
More than ever before, policy enforcement has become paramount to ensuring healthy risk mitigation. Today is a time for agile business execution and the ability to be flexible during these challenging times. We all know that procurement organizations mostly evaluate potential suppliers based on price alone, but what about the soft skills? How can you put value to the intangibles your organization offers from a partnership perspective? Aren’t these the skills we are looking for in a partner, especially in unchartered territory?
When it comes to agile execution, think about how to provide a framework for transparent and dynamic commercial governance, visibility, and accountability defining compliance while identifying, measuring, managing and communicating (and sharing) risk.
Flexibility and adaptability are key soft skills required for companies to execute seamlessly within their operating framework. Bringing value discussions to the negotiation table is easier said than done but having visibility as a provider into what goes on during the deal lifecycle and being factual about value exchange during volatile market conditions will elevate the conversation with full transparency, accountability and coherence going forward.
Lack of flexibility in holding customers to Terms & Conditions might only endanger companies down the road if you don’t consider their lifetime value. In situations like today’s environment, customers will ultimately not be able to keep up with volume commitments, they might not be able to absorb pass through changes of raw materials or accommodate how supply chain disruptions are going to affect them, exchange rates, etc. A robust and dynamic pricing execution platform is key to quickly assess, simulate and model what the different scenarios will look like. Having an open line of communication with full transparency is critical.
Pricing is your single greatest tool
Pricing is the single greatest tool you can have on your side during times like this. The ability to quickly adjust and adapt your offering, understand what to protect and what to give away, and manage pricing fluctuation ensures you not only value and act responsibly toward your shareholders, but to your customers as well.
Only an end-to-end commercial excellence framework can allow you to not only have visibility into the key factors that drive profitable business growth but also the ability to execute seamlessly and deal with the levels of complexity driven by today’s needs. It gives you the flexibility to adjust to market conditions so you can continue delivering value to your customers, elevating the partnership and growing your brand equity while it matters most.
Now, most companies are placing holds on budgets and cutting unnecessary spend. That’s all well and reasonable given the circumstances, but that action only addresses the near, foreseeable future. Now is the time to invest in a commercial excellence solution because it encourages nimble execution with a source of truth to provide value. This is how you elevate the conversation with your customers.
Allies are lifelines
In war, allies are lifelines. Companies are looking for allies (partners) to have their back to help keep their business afloat. While top and bottom line growth are the key drivers that the street companies measure up against, that’s not always what your customers care about.
All enterprises are for profit of course but what I really find exemplary however is that in this critical and unprecedented situation, certain organizations still raise above others and care as much about their social responsibility and commitment to the communities they affect well beyond a pure P&L performance. The key reason is they excel at executing seamlessly their business strategy within a governance framework that balances out brand equity, mission, deliverables to shareholders and social responsibility to all their stakeholders. This crisis is really proving that over time, brand equity — the promise of delivering value and caring for the communities your company impacts — is paramount for long term survival.
Similar to German Chancellor Angela Merkel’s speech, we want to enable organizations to have direct, honest and empathetic conversations about the challenges ahead. Let us help you with the execution framework so you can focus on what really matters: What brand equity are you building for the future? What will your customers be saying when this is all over? Will they be supporting you? A logo is a thing, but a brand is a promise.
Vendavo business consultants are here to help you with these challenges and set your team on a course for accelerated recovery from today’s challenging environment. Contact us today for a free consultation.