Contraction. That is the dominant characteristic of decision making in, and among, a broad spectrum of businesses in the retail sector that deal with other businesses. The B2B segment has been subjected to profound structural changes during the past two years.
Retrenchments have thinned the ranks. Delegated authorities have been withdrawn and concentrated to those in higher ranks. Budgets on discretionary purchase items have been slashed. As a consequence, many relationships have been noticeably fractured, and some instances, terminated. Those who once had the authority and power to say ‘yes’ have been reduced to the option of only saying ‘no’… unless referring it to others.
Income streams have rapidly dried up, particularly for wholesalers and distributors. Remedial actions by service and product providers who have lost income streams can readily encounter “locked doors”, or advice that new supplier arrangements have been implemented which do not include them.
One-on-one relationships in business are characteristically fraught with danger. Changes in personnel, regimes and policies expose often long-established suppliers to the reality of cash flow evaporation. It’s not so much that the “dam has run dry”; it could be that it is being rechanneled or dammed upstream.
It is a two-sided coin. As staff members of supply companies walk out the door, so too do a number of clients. Loyalty can be, and often is, personal. Therefore, the lessons which are being strikingly and tellingly learned in the contemporary marketplace underscore the imperative discipline of ensuring that B2B relationships are established, sustained and enhanced among at least two, and preferably more, people in each entity.
Disruption is not a concept that is limited to technology. Disrupted relationships and supply agreements can be, and often are, destructive.
The conduct of regular audits of B2B relationships, communication channels and logistic infrastructure is prudent, if not essential. It contributes to the attainment of optimal productivity, consistency and continuity. Moreover, contingencies can be formulated, documented and implemented to avoid or redress disruptions and contractions.
Barry Urquhart runs Marketing Focus and is a business strategist, consumer behaviour analyst and keynote speaker. He can be contacted at Urquhart@marketingfocus.net.au or on 0419 835 555.
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