people buy people

‘People buy people’, so you’ll need to decide who you are to build successful business relationships, says Janet Lung Standing.

The idea that ‘people buy people’ is fundamental to the success of any business.

Wholesalers support the small- to medium-sized retailers, on-trade customers and foodservice vendors that are the anchors of their communities. They continue to support them in the face of the myriad challenges threatening the industry today: rising labour costs, a new competitive landscape stemming from the rise of e-commerce, discounters, supermarkets investing heavily in their own c-store estates, and the growth of foodservice and quick service restaurant chains. But, for the vast majority of wholesale businesses and their customers, the differentiating factor is the ‘people experience’ – and the idea that people buy people is more important than ever before.

Successful business collaborations built on this idea always have a good match of partners and ongoing nurturing of the relationship. A good match entails having a clear, compelling common goal; each party having complementary competences and attributes; and, most importantly, a connection in values and beliefs.

To find a resonance in values and beliefs takes intuition, courage and ongoing effort from business leaders. And what is it that we look for? Authenticity, coherency and transparency. Ultimately, however, we are looking for the basis of trust.

When these elements are missing, even a seemingly harmonious business relationship can fall apart. A prime example of this is the case of FMCG giant Danone and New Zealand dairy co-operative Fonterra. In August 2013, the latter announced a recall of one of its whey protein concentrates (an ingredient used in infant formulas) due to potential contamination by botulism. This later turned out to be a false alarm.

However, before then, Fonterra’s customers – including Danone – conducted massive product recalls across several Asian countries, including China. As a consequence, Danone suffered huge business disruption and damage to its brand in China.

A subsequent public inquiry conducted by the New Zealand Ministry for Primary Industries highlighted a lack of coherent quality management at Fonterra, for which it was fined. Danone in particular felt let down by what it perceived to be a paucity of timely transparent facts from Fonterra.

This was what ultimately caused the breakdown of trust and put an end to a 10-year supply partnership. Danone launched a legal case against Fonterra for NZD$1bn that is still ongoing.

To build a successful collaboration, business leaders need to take time to express what their organisations stand for and the principles they operate with, so that both parties know where they stand. It is also important to check that the company’s values and beliefs are consistently observed in different levels of the organisation. Be it quality, sustainability or integrity, your staff have to embody the necessary values.

Nevertheless, even the best matched relationships need good nurturing to thrive. Do you have processes in place to ensure that you are cultivating the ‘people buy people’ bonds you have with your customers? The ability of both your business and theirs to thrive in this marketplace hinges on it.

Janet Lung Standing has more than two decades’ experience in the FMCG sector, having worked for Mars and Danone. She is director of Janet Standing Consultancy and vice chair of the UK chapter of Leading Executives Advancing Diversity.


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