In the late 1990s, I thought I had discovered the business-to-business marketing success secret, from the late Walter Hailey. He advocated that you should think about the supply chain, and plant your marketing approach so you are right in the middle of the owner-supplier chain.
This model (for now) has been successfully implemented by third-party compliance verification services. These organizations sell their compliance management services to project owners for substantial fees (though I suppose if you are a multi-billion dollar utility or energy company, a few tens of thousands in annual costs won’t bother your bottom line very much.) Then, as the mandated ONLY intermediary, they insist that subtrades and suppliers wishing to bid work to these corporations sign on for their services. The supplier-side fees are lower, but they still need to pay several hundred dollars annually. And the compliance companies can of course sell additional services, training and the like.
Note how these businesses fit within the supply chain. Once the compliance company has sold the owner on their service value, the revenue flows in increasing volume from current and potential suppliers. It’s a sweet business — for the compliance verification business — but clearly the system can arouse hostility, tension and push-back from the supplier/trades sides. And, at least in Ontario, these companies have started complaining to their relevant industry associations, who are pushing back.
I don’t know where this story will end but am quite aware that we got into the same “middle of the picture” story a few years back when we — and other publishers — abused the supply-chain model, as well.
Here, we would sell owners on the idea of producing feature reports about their businesses/projects. Then we would get a list of the subs and suppliers, and sell these companies on the virtues of advertising in support of the project. Most of the times, the advertisers signed on purely because they wanted to keep the owners happy. We didn’t need to justify our circulation, product value, quality, or anything that really would do anything good for the supplier-advertisers. The owners, of course, enjoyed the free publicity — until the pushback reached rather extreme levels.
I knew things were going wrong with the model when we started hearing really bad things about our business from association representatives, and also when owners, who had previosuly eagerly provided hte supplier lists for projects, started declining. We, unfortunately, had taken the easy road, not realizing the importance of the most fundamental marketing principle — if you don’t generate real value for everyone with whom you work, you will ultimately achieve resistence, hostility and serious brand/business damage.
Thankfully, we corrected the problems just in time. This blog is one of the consequences. I decided that, while we could not guarantee our advertisers with direct sales results (no media, except commission-based affiliate models can) we could still guarantee real value by providing enough marketing insights and resources to our clients that they would ultimately profit from the arrangements.
We also started providing solid editorial coverage to any advertiser wishing to participate (editorial works better than pure advertising), helping clients with community service and non-profit initiatives, and (significantly) spending a lot of time working with and supporting their trade associations, without worrying about any return on investment. (In fact, the latest story about third-party compliance results from our healthy association relationships.)
The result: We still earn most of our revenues through the supply chain relationships, but we do it right, without coersion, and with respect for the clients.
Your takeaway: Thin about your business and where/how you can discover away to provide an essential, resourceful service that will appeal upstream to your actual client purchasers — that is, think about the businesses and organizations who are paying (are the clients of) your target audience. If you can build or package your service to the client level, you’ll find it much easier to swim downstream for effective marketing. But beware: This model only works when you practice with genuine integrity and that means that the organizations who purchase form you because of your relationshps/connections with their clients, must believe they are treated fairly, respectfully and with genuine value. Otherwise, you risk destroying your brand, reputation and ultimately your business, despite the short-term illusions of high margin and easy sales.