The ACX Consulting Blog v.2.0.

In my last post I promised to share a couple of my own observations on the importance of maintaining a good network of business and social connections. However, it seems that this axiom does not require further pondering, and I switched the accents a little bit to cover another aspect thereof, and that is, global b2b cooperation.

Let's start off by making a statement that holds true for most industries; with the Internet, practically anyone can enjoy what the world economy offers, and that is —almost unlimited supply of goods, products and services. That boils down to the fact that anyone can purchase batik from Indonesia on Ebay or order CAD drafting services on Elance to have 27 companies from Pakistan, Spain, Romania, South Africa and Ireland compete for your bid. A marvelous picture, isn't it?

Well, it is. The obvious benefit is the unbeatable price one may get shopping worldwide. It's true that global competition brought down prices for most products and services by eliminating the geographical component in the perceived value of a good or service and by increasing supply and accessibility to various markets.

Also, variations in local labor pricing in different regions of the world allow the service providers in developing countries to make more money than on the local markets. Alternatively, the SPs in the US and Europe reduce their rates to maintain competitiveness.

At the same time, global competition has another effect that many of us notice but few choose to recognize and act upon, and that is reduced quality. It is unrealistic to expect that a service for a dramatically reduced price offered by the same provider you've been dealing with for years will be provided on the same level of quality as before.

The explanation is simple. Instead of being the only guy in town making CAD drawings and getting away with outrageous prices just because he's the only one there, a service provider is now competing against dozens of Ukrainian drafters offering the same service for much less. Since the price is low, to maintain the same level of income he is used to, this guy needs to complete three projects instead of one before.

So, we end up with lower prices plus reduced quality of goods and services that are easily accessible on the global market. Is there an alternative to the second part of the equation, that is, reduced quality?

This is the part that has to do with global b2b cooperation. Instead of hiring your next door's service provider struggling to stay afloat, you may hire a highly qualified company elsewhere in the world — Czech Republic, or Latvia, or Thailand, that provides extremely good quality services that are cheaper just because labor is still not as expensive. Additionally, they may even be better than the guy next to you, and all that for a good price.

We at ACX Consulting do help small and medium businesses find their partners worldwide. We explore possible alternatives to your company's existing business processes, then figure out a plan to test and try those alternatives, and if proven operational, we continue on perfecting your newly acquired processes until you are satisfied.

Posted by CEO at 06:16 PM | Permalink | Comments (0) | TrackBacks (0)

Recently, while working on the new projects, I noticed that establishing mutually beneficial business opportunities is a tricky thing. People don't seem to bother to answer emails in the middle of a promising conversation thread, cutting off the communications in its entirety.

It seems to be a popular trend going around when people are abruptly dropping the conversation and declining to reply to further emails when they feel that they do not clearly and obviously benefit from the results thereof. To put it in plain and simple English: "All of a sudden, I'm not interested in talking to you and I don't have enough guts and politeness to reply to your emails, so I'll just pretend my Outlook Express has developed an allergy to your incoming emails and hope you're dumb enough to believe it and not blame me".

I am sure most of us have been through hundreds or thousands of conversations that have lost their edge and are of not too much interest anymore. However, even though the matter you're trying to avoid may not bring you ten thousand dollars on the spot, there is no need to ignore a person communicating to you by not answering his or her emails. Of course, spam and other unsolicited emails should be treated adequately, no doubt about that, but...

The nature of contemporary business can be described as limitless opportunities and alternatives within a few clicks of a mouse. If you're not answering emails, somebody else would. If you are not thinking ahead into the future by severing further contact opportunities, then someone else is going to work with your partner. Most likely, a person who got dumped will make a point to spread negative publicity about you amongst his or her social network members.

One of the marketing gurus (don't remember who exactly, would appreciate a hint) said that a satisfied customer would bring three additional clients, but a dissatisfied customer would take away ten existing customers. This math is pretty grim for anyone selling goods or services and it applies to all areas of marketing and sales, as well as to HRM, logistics, etc..

Recently, a friend of mine shared a link leading to a serious website dealing with the subject of customer loyalty, Netpromoter.com. Two concepts have caught my attention, the concepts of promoters and detractors (basically, the same concept as the one I referred to above regarding satisfied and dissatisfied customers), and of good and bad profits. To save everyone time I'd just post a link to their page describing these concepts, and I am sure you'd agree with me that having too many detractors by ignoring your current or potential counterparts' or prospects' emails will eventually hurt your business.

Another implication of this issue has to do with business networking and relationship building, and I am planning to share a few thoughts on this matter in my next post.

Posted by CEO at 06:56 PM | Permalink | Comments (0) | TrackBacks (0)