Customer Empowerment: Why an Educated Consumer is (Still) Our Best Customer
By 7 minute read• Published March 15, 2023 •
The slogan “an educated consumer is our best customer” stood out when Sy Syms, CEO of the Syms Corporation, used it in television ads in the 1980s. Customer empowerment was an already popular notion back then.
Fast forward to today and zoom in on the decision making process involved in selecting a supply chain finance solution. Not surprising, the old slogan about customer empowerment still holds true. When making a complex, long-term decision with far-reaching implications for your company, your global trading relationships and interactions with financial institutions, such as launching a global supply chain finance program, selecting the right partner and platform is a crucial task.
Recently, a multinational corporation that had implemented a supply chain finance program with a bank proprietary system a couple of years prior to contacting PrimeRevenue and asked if its financing platform supported certain functionality their current bank provider was not able to support. Surprisingly, a few years back, during the evaluation phase of different solutions and platform providers, the company had been advised by PrimeRevenue to consider a set of specific features and requirements, which were key success factors in the deployment of a global supply chain finance program. However, at the time, the company didn’t feel those features were important for the success of the financing program.
Secondly, the decision makers within the company were told by their bank that the functionality was supported. As it turns out, the devil is in the details.
The platform functionality provided by the bank was very basic and unable to support the complex requirements of the client’s financial supply chain. When selecting a supply chain finance provider, properly vetting that company will determine whether or not your supply chain adds value or just hobbles along. This is a story with a positive twist.
A few years passed by, and the supply chain finance program was put in place. However, because of this missing functionality of their bank provider, the financial results expected by the management and shareholders were not achieved. The company reached out to PrimeRevenue again, this time with a better understanding and appreciation of the of the key success factors in supply chain finance.
Isn’t that always the challenge in sales?
You have a solution to a problem. You build features, create services, and set up sophisticated technology. The sales team goes to market and explains to prospects why the solution is the best in solving their specific problems. The vast majority of companies find it challenging to select the right supply chain finance provider and lack a solid benchmark of what they should be looking for from a provider to ensure the long-term success of their program. When it is all said and done, despite all of the customer empowerment education done, some companies make their final decision based on relationship and trust.
Who do I trust and have a long-term relationship with? My bank has been my partner for years. They are deploying this kind of solution in the market today, how can I go wrong with that selection? They go down that route, and while selecting a bank proprietary system isn’t always a bad decision, it often turns out to me a limiting choice has a long-term effect on the company’s performance.
Lessons learned: identifying the must-haves vs. the nice-to-haves in supplier finance
Coming back to the initial slogan of this article, PrimeRevenue’s best prospects or consumers are supply chain finance customers who have been through a successful customer empowerment deployment. They know the challenges and the key success factors such as:
- Establishing an appropriate terms extension strategy for suppliers before the launch of program
- It is important to sesign, outreach and track the success of a program on an ongoing basis
- It can’t be a one-size-fits-all approach for terms
- Rate arbitrage is good for some suppliers but not for all suppliers, no matter who you are or who the supplier is
- In terms of your program success it does not matter whether your supplier sells its receivable or not
- The goal is achieving terms extension, if working capital is your objective
- Getting all suppliers educated on supply chain finance and explaining the benefits for them does not have to be challenge
- Your supplier may not listen to your bank about why this is good for them just because they are your bank
- The goal of supply chain finance is to have as many suppliers as possible eligible to onboard the platform regardless of the supplier’s size, credit rating, jurisdiction, currency, language, commercial disputes, seasonality, years of being a supplier, leverage, products, and/or cost of funds.
In a recent book Get Content. Get Customers by Joe Pulizzi and Newt Barrett, the authors are challenging the Syms ideal. According to the book, customer empowerment makes it more difficult to sell them. Could both statements be correct? The simple answer is yes, depending what functions and capability your solutions offers to the problems of your customer.
For PrimeRevenue, it is a welcome change to a maturing market with an educated consumer selecting the best solution based on capabilities, experience and capabilities. If you want to know what key feature was missing in the deployment and platform of the company’s supply chain finance program, please write us an email and we will provide you the information.