ALLIANTIST

It's a tough period for some industries; well-known banks and travel firms have gone bust, and there are fire sales elsewhere. Much of the aftershock is now being felt by the relevant upstream suppliers and downstream partners, as well as customers. And we are hearing about organizations turning to old tactics and blanket policies for troubled times. Examples include:

• beating up suppliers to achieve immediate cost reduction;
• introducing embargoes on discretionary spending;
• eating downstream partner rewards by taking their "piece of the pie"; and
• expecting partners to discount more heavily in joint offers.

After people costs an organizations largest expenditure is generally their supply base so it's understandable that the leadership will turn upstream to secure margin improvement. And it makes sense that vendors will want to defend and improve sales with their existing customers as new customers are harder to win. But having a one size fits all approach to the portfolio, whether its upstream suppliers, customers or go to market partners is a recipe for disaster.

Don't let a good crisis go to waste and view tough trading conditions as an opportunity to get the best from your portfolio of relationships, not as a threat to them. If you don't already have a portfolio and category based approach to your relationships then you may well have an inefficient operation and wasting assets that could deliver higher returns elsewhere.

But remember a poor reputation may be for life, not just a downturn so how you go about securing extra value from your relationships is essential to success. Organizations need to allocate their assets carefully and implement initiatives based on the category value and importance as well as relationship significance to your success; not one size fits all. The graphic shows an example from a supply side portfolio although the principles of portfolio management apply equally to sales and other relationship activity as well.

People must be equipped with the right tools, mindset and systems to get the job done well, whether it is with a strategic alliance or a commodity provider. Organizations should use the latest partner and relationship management tools like PAM for high value and important relationships (strategic and critical in the graphic), and traditional transactional automation tools for commodity activities.

To find out more about portfolio management and how to get the best from your relationships in life read the article in our resources section and contact us now on either +44 (0)1273 704500 or email enquiries@alliantist.com