I may be a bit biased but there is no doubt that the Swiss make excellent chocolate. High quality combined with clever marketing has resulted in growing sales revenue around the globe.
Recently the Swiss National Bank decided to discontinue the minimum exchange rate of CHF 1.20 to the Euro and as a result the Swiss Franc rose rapidly in value, increasing the cost of Swiss chocolate in comparison to French and Belgian competitors. Many retail customers find this price rise hard to swallow (sorry, no more chocolate jokes) so Sales People in Swiss chocolate companies face a real challenge.
Branded confectionary and ingredients
Our client is a Swiss chocolate manufacturer and you will be familiar with their chocolate bars if you visit travel retail shops in airports and on cruisers. They also make own brand Swiss chocolates for a famous UK retailer.
The greatest problems for our client resulting from the strong Swiss Franc have arisen in the ingredients market; they supply cake manufacturers and ice cream making companies with a range of semi-finished products like fillings, coatings and couvertures (which is like chocolate only more chocolaty!).
The challenge of only being an ingredient
Our client is perceived by cake manufacturers and ice cream making companies very much as a supplier of ingredients. Their primary customer contact is Procurement and as we know, Procurement people care about one thing above everything else – price. Not good if you are a Swiss manufacturer of semi-finished chocolate products competing against less expensive competitors from France and Belgium.
Reframing the relationship and becoming a business partner
To support the transformation from being perceived only as an ingredient supplier, we are working with their sales team to change who they are talking to and what they talk about. Reframing the customer relationship requires a change in attitude and sales approach, finding out much more about the market their customer is in and the aspirations of the business.
They need to move from conversations with Procurement that focus on price to conversations with Product Managers, Marketing people and even the Senior Management Team. The content of conversations needs to shift to how they can help the customer grow their business.
One of our client’s key customers is a high-end cake maker with a chain of stores in the Middle East. By conducting a Customer SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis, our client was able to identify joint opportunities focused on making the cake maker more successful in their business.
The first thing offered was staff training to cake makers in the Middle Eastern company. Our client has many highly trained chefs who were happy to transfer knowledge and expertise. Then, having established that there is a high frequency of lactose intolerance in the Middle East, our client was able to offer lactose free chocolate.
Based on an improved understanding of customer goals, our client is starting to offer consultancy that would enable cake makers to strengthen their export business and start to build a distributor network. Time will tell if these measures can overcome the threat from French and Belgian chocolate makers who sell in Euro, but the ideas are being well received initially by customers.
Use your loaf
Ok, so just one more food joke and I promise that’s all. Another client produces bread. Part of their market is selling to sandwich makers and in-flight catering companies in Switzerland.
When I travel to the UK I marvel at the range of sandwiches on offer in supermarkets, motorway services and even petrol stations. Not just sandwiches but wraps, filled bagels and all sorts of innovative bread products.
The Swiss sandwich industry has some catching up to do. Our bread manufacturing client is going beyond just supplying what the sandwich maker asks for and now works with them to create new sandwich ideas, bread products and other innovations. They have moved from being an ingredient supplier to business partner and made their relationship much stronger as a result.
Questions to ask yourself
Do your customers perceive you as a supplier of a product/service or as a partner that helps their business grow?
Have you done a SWOT analysis of your key customer’s business lately?
What external changes could make you less competitive?
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