Kenyans street-danced wildly celebrating President Obama?s victory with a red plastic chair over their heads. I reckon it signified an African has once again won the high chair of world power. That?s real mass propinquity. Obama?s father was from Kenya, so a world face has entered American elections. For the underprivileged worldwide, African-American Barack Obama has written world history, not any other conqueror that?s considered of superior race.
Obama?s campaign was clearly a proximity game. He even dissected households by Indian, Hispanic, Catholic, Protestant et al. An incredible 71% Hispanics, 60% below 29 years and below $50,000 income, 55% women, 62% urban, 73% Asian, understandably 93% African-Americans voted for him. I found Mitt Romney?s public presence quite opulent. His double-R election identity looked like corporate America, alienating the masses. The day before polling, television showed Romney disembarking his private jet, surrounded by white people. Democrats Obama and Biden mixed freely, looked relaxed without neckties, hugging whites and non-whites alike. American culture has changed. Earlier poor Americans didn?t resent rich people?s achievement. But now Romney was seen as representing the rich, while Obama?s charisma brought him close to common people. Proximity is beyond money; in this race Romney spent more than Obama, proving that money doesn?t build proximity.
Political leaders come and go, but in business, all-time proximity beyond the company?s closed doors is the core of success. When business goes awry, ?Fix it with branding? is the fashionable battle-cry in Indian industry. But that never solves the real problem. The brand?s first success factor is intrinsic quality differentiation from competitors (http://shiningconsulting.com/wp/2010/business-sustainability-perceptible-selling-differentiation-2/). That?s easier to handle as quality is in the company?s control. The second success criterion is high performance proximity management of the wide-open zigzag external environment. Residing here are customers, influencers, vendors, talent pool, distributors, dealers, retailers and society at large not in anyone?s control. I?ve observed Indian industry pays little attention to this difficult task of gaining closeness to the open criss-cross surroundings.
High involvement category: Selling high involvement products like automobiles, electronics, home appliances, mobile phones, industrial hardware, courier service, among others, requires high proximity with customers. Manufacturers recruit high profile, well-paid company executives who don?t interface customers. Its contracted salespersons hired by distributors/dealers at dealerships that have to drum up quality relations with customers. In general these frontline people are low salaried, barely understand the product as they?re not trained properly and have no soft skills to interact with multiple types of customers. Manufacturers don?t build up these delivery guys responsible to transmit their corporate value to the buyer. Nor do they excite dealers, distributors, retailers to take ownership of the brand.
FMCG products: Point-of-purchase behaviour is big a science to understand the customer?s psycho-socio buying motivation. Indian FMCG brands often sell through wholesale distribution, sometimes as much as 50-70% sales happen this way. Manufacturers have no control here. In the West, organised multi-brand retails challenged manufacturers since 1970 by coming up with private labels of daily utility products. They now own 60% market share in these stores.
In 35 years of consulting, I?ve never undertaken strategy formulation without interacting with the client?s distributers, shareholders, customers, vendors, talent pool. My clients worldwide know about my obsession on proximity being the crux of business. In fact Danone CEO Jacques Vincent was telling my wife 20 years later about why he?d started coming to office by metro. He said I?d explained to him that corporate boardroom makes no sense in business as distributors, customers and vendors are all outside. My point was to absorb society by experiencing it, not by readymade data. His metro journey gives him society?s pulse.
A brand is vulnerable in the trade. Relationship building with a hospitality-industry attitude is the core to brand management. Unorganised kirana retailers have to admire the brand to give it importance. Gone are the days when manufacturers could command. Today retailers don?t tolerate delivery time delays or negligent trade relationships. The new trend is they paste their names on Chinese goods in some categories, and call them private labels. Indian electronics brands pay high margins to dealers, but Korean brands pay low margins and sell more because of customer friendly quality and close distributor ties. To discover customer needs and desires, salespersons of Korean companies mandatorily stay overnight in villages and travel in second class train bogeys.
About eight years ago in an executive workshop, I was giving my Marico experience of getting strong visibility with a brand block of multiple bottles. Everybody from the client?s side said the retail shelf is always paid for. On our market visit in Jaipur?s famous MI Road, we crossed a cosmetics store selling foreign products. A single blue Parachute bottle stood among them, bolstered by a Parachute brand block just behind. On enquiring from the retailer, the client team found it was not a paid shelf. The retailer said he?s really appreciated the friendly, professional behaviour of Marico representatives over the years. One Diwali they even gifted him a promotional table fan with no strings attached. This proximity he feels makes him give the brand good shelf visibility.
Business transaction between two corporate houses (B2B): Managing customer proximity in B2B sales involves relationship nuances, knowing the customer?s personality, company culture, social mores and geography where the customer is driving business. Here customers don?t care about the selling company?s size; the sales/service person drives its image. If the salesperson builds superior social and business relationship, big business can generate from the B2B house.
High quality product, creation of brand pull, trade margins are all required. But the biggest business winning game is to create outstanding hospitality-industry-centric proximity management. That should be the company?s highest priority policy with distributors, dealers and retailers; in B2B business it?s with customers. A product or service can make incredible commercial success that sustains when the zig-zag open environment becomes a part of the brand and enterprise ritual.
Shombit Sengupta is an international Creative Business Strategy consultant to top management. Reach him at http://www.shiningconsulting.com
