The sole purpose of any business is to make money. To make money, a business needs to identify, anticipate and satisfy customer requirements profitably, which requires a wide variety of business activities. Some of these activities are banded together under the term of “marketing” or “sales and marketing”. Without getting into the perennial and pointless argument over what marketing is or is not, if a business is to produce profitable income, then all those activities which directly and indirectly contribute to satisfying customer requirements, ought to be managed collectively under the overall direction of one senior manager.
In the past, many businesses have often been product or service orientated, and have suffered because they have not been sufficiently aware of their customers’ needs and the changing trends in their market. In more recent times, businesses have become financially driven, often becoming fixated with “the bottom line” and the level of short term and immediate profit. However, even this financially driven attitude to business, which concentrates on the profit objective, often tends to ignore the fact that it is the customers who provide the income, and the employees who do the necessary work to get it.
New business practices such as “social marketing”, “e- business”, and even CRM (customer relationship management) tend to concentrate on the communication of the business message and the acquisition of customers. Such activities can be very successful in promoting a message and delivering the customers which produce the income in the short-term. However, while new and inventive methods may initially produce more customers and income, it is generally the more traditional methods of doing business that will retain customers and maintain the flow of profitable income for the future. Generally, it is ability to maintain the reliability of the product and service that retains customer’s loyalty and their willingness to continue to purchase. Thus being aware of all those activities which directly and indirectly affect the delivery of the product or service to the customer is a fundamental to ensuring customer satisfaction and retention.
For the commercial manager who is responsible of producing the income, managing, motivating and directing all the personnel collectively responsible for satisfying customer requirements, is essential for success. While ideally the commercial manager should have charge over all those activities involved in everything that relates to the customer, other than finance, personnel, supply and IT, this is rarely the case. In most cases, commercial managers sit along-side production managers, distribution mangers and others, because that is the way that the business is structured. However, because it is the commercial manager who is responsible for producing profitable income, the actions and effectiveness of those managers who have responsibility for other customer related areas, will be of direct interest to them, as their actions will directly affect profitable income.
Leadership should provide direction and inspiration, but only good management produces tangible results. Commercial managers need to measure all aspects of their areas of responsibilities and as far as possible, those other areas where they have interest but no direct responsibility
Performance measurement is an indispensible part of commercial management. Used properly, performance measurements should be used to illuminate not only performance within a business organisation, but also to indicate where changes are taking place with customers and the trading environment. However, management which is driven by performance measurements alone is likely to erode employee’s confidence and motivation, which will have a negative effect on their overall performance. At the same time performance measurements can help employees maintain and develop their own achievement.
An effective commercial manger will keep their staff motivated by listening to their concerns, assisting with their problems, ensuring that they have the resources and necessary training, and encouraging their involvement in identifying potential improvements as well as problem resolution.
What actions should the Commercial manager undertake to maximize and motivate performance?
The commercial manager should ensure that each employee:
1. Understands their job description, their responsibilities, and reporting lines.
2. Understands the importance of their contribution in the company team and the reliance that other team members will have on them.
3. Understands that the business is there to make money by satisfying customer requirements profitably, and that their individual efforts contributes to making that possible.
4. Is encouraged to express opinions on how improvements may be made in satisfying customer requirements while maintaining and improving profitable income.
The commercial manager should also:
5. Use performance measurements to assist employees maintain efficiency and to indicate change and developments in the business environment.
6. Ensure that all those collectively involved in satisfying customer requirements understand that they must collaborate as a team to produce profitable income and the desired results.
Detailed business and marketing plans, and expensive promotions will achieve little unless the personnel involved are capable, motivated and effectively managed. For the Commercial manager, maximizing profitable income efficiently depends on the effective motivation and management of everyone involved in satisfying customer requirements.