Formalising a sales contact strategy that clearly defines customers into channels and challenges us to recognise that customers behave differently – and thus we need to adapt our approach and keep the customer central to our thought process – is a relatively well trodden path. But what should we do if our customer is part of an extended value chain that takes our products based on their quality and service proposition and then transforms them into goods for sale through a third party?
Simply the answers rest in how customer centric we all want to be. Focusing on contract caterers, even limited research throws up the fact that they work across channels supplying goods to both cost and profit sectors and extend their offering into the operations of their customers through delivering services that vary from full service restaurants, through cleaning to selling cans of juice or supplying vending machines. In 2008 this type of activity through contract caterers was worth more than £4bn in turnover, up 3.9% over 2007, according to the British Hospitality Association (BHA).
While contract caterers may choose to specialise in their own channel focus, the larger ones of course will work across channels, and segment their offering of product, service and contact to ensure that they are able to talk in the context of their customer base.
How do the best wholesalers and suppliers greet the opportunity that exists through contract caterers? Rick Hough, one of our business partners at ‘How to Solutions’, has worked extensively with this customer group, building an approach to contract catering that helped him shape a large and growing business based on two key platforms – understanding and focus.
Understanding starts with what your contract caterer needs to fulfil the requirements of its customer contract. This mustn’t be confused with what you have to sell. Being able to separate oneself from your total portfolio offering and concentrate on what is needed is a must.
That means you should start with which customers or channels your contract caterer is selling in to. You will need to understand the timescales of those focus channels (what do menu cycles look like for example, does seasonality in the market play any part?) and is there a specific need or language that is used, perhaps around nutrition or ingredients and thus tailor your approach and offering accordingly.
Additionally, focus on the margin model that you believe will be in operation and be able to relate your product costs on a per serving basis. Establish in your mind the relationship between cost in, selling price out and the margins that exist between. Be aware of how your product will appear; on a menu or complete as part of an impulse offer perhaps? Are we talking high end marketplace or functional take away or faster food?
Also brands have a real role to play front of house. Use your collaborative relationships with key branded suppliers to offer some excitement and display at point of purchase in impulse areas and at point of sale.
Strive to play a part in future sourcing for your contract caterer – find out what type of debate they are having regarding local sourcing and their approach to corporate social responsibility. Investigate whether they see that their end-user is taking up any initiatives to appeal to their own consumer base. These could be as varied as supply chain driven or recent announcements regarding the Food Standards Agency partnering with key high street and licensed trade operators to offer reduced fat and salt alternatives as part of their menus. Be part of that type discussion if you have the range or expertise that fits. Don’t be frightened of the future. Through debate play a part in it and remember the timescale involved in bringing any such action to market.
Rick also observes some best practice regarding contact strategy. “Don’t go in to this half heartedly. For best results, having put your contract caterer central to your thinking, build a contact matrix at all levels of your business and that of your customer. You’ll need to add value at every level. No tea and two sugar meetings, but recognise that a network approach can lead to great knowledge building and better customer solutions, all aimed at repeat purchases and growing profits.”
One final word from the wise. Don’t lean back in a chair and ask your contract caterer to explain their business. It’s insulting and shows a lack of effort. Do the research and hard yards to find the information you need and then decide how your company can save, solve or simplify part of the processes that are taking place. That could be through the supply chain, the menu plan or a high profile initiative, but as a wholesaler or a supplier make the effort to understand first.
The BHA estimates that contract caterers supplied approximately 17,000 outlets and served 1.63bn meals in 2008. Your part of that prize could well be worth the effort.