BusinessForward

By:  Jennifer Rignani, Senior Writer, BusinessForward

BusinessForward founder and CEO John Huckle worked at procurement software giant FreeMarkets (now the Ariba Division of SAP) from 1996-1999 as a senior project manager. Applying the customer service lessons he learned there and experience with other companies, John founded the consulting firm BusinessForward in 2006. This article is based on a conversation with the Founder and CEO of FreeMarkets, Glen Meakem, about customer focus and is the first in a two-part series. Determining the Right Sales Channel will be published in July 2015.

While there’s much debate from the The Wall Street Journal to Wharton about the customer always being right, one thing is certain:  you at least better know who they are. According to preeminent entrepreneur Glen Meakem, understanding and providing value to the customer is the primary, guiding force behind business success. With this laser-focused compass, he’s harnessed the zeitgeist more than once.

As energetic as a NASDAQ opening bell, Meakem tells the story of his success. He says, “We were the first people in the world to do what we did at FreeMarkets. We helped major corporations automate the process of finding and contracting with suppliers.  One key part of this was that we introduced the world’s first downward price online auctions for supply contracts to businesses, and saved our buyers a lot of money. And what made it work was that we really knew our customers. No matter how good your product or service is, to succeed you must make sure it meets critical customer needs, and can be accepted and embraced by customers.  You must make your offering important to the people who are your customers.”

Meakem’s interest in what’s important to people is absolutely authentic. The business leader is known for spending an inordinate amount of energy on company values and culture, seeing his employees as customers as much as those purchasing products and services from the company.  John Huckle, founder and CEO of BusinessForward and Eben Adams, Director of Customer and Partnership Development at BusinessForward worked with Meakem.

Huckle says, “My time with Glen at Freemarkets was exciting for many reasons, but at its core, I’ve taken away the fact that creating a positive workplace with a very clear mission makes for a happy team.” Adams adds, “This frees people to truly focus on the customer.”  Huckle and Adams stay in regular touch with Meakem and have framed much of the BusinessForward customer-centric consulting and sales approach in FreeMarkets style.

When talking about achieving success through focus on real customer needs, Meakem delves deeper into his business strategy.  While there is no doubt that he and his co-founder, Sam Kinney sparked the legendary rise of FreeMarkets with radical thinking like using downward-priced online auctions between businesses, Meakem points out that FreeMarkets was following a “Blue Ocean Strategy.”  Although this phrase was not coined until after the sale of the company, it is an apt metaphor.

The idea of blue and red oceans comes from the best-selling book, Blue Ocean Strategy, by W. Chan Kim and Renée Mauborgne.  Quite simply, a “blue ocean” is a wide-open, uncontested market space, created when a company decides to compete in a distinctive, new way – new products, new customer benefits, new marketing messages, etc.

A “red ocean” is a highly competitive market space where companies are competing against each other with similar products based on price.   In “blue oceans” demand is created rather than fought over.  And as implied, a business operating in a blue ocean has a deep and enormous potential to grow.  “Red ocean” businesses operate in crowded spaces with non-distinct products and services, where competition is cutthroat and prospects for profits are weak; hence, the term “red ocean.”

It is in this context that Mr. Meakem has found great success. In the case of FreeMarkets, the product and services were unique, but it took some trial and error to figure out who to sell to – who the real customer was – and how to price and position the offering to that customer.  One potential customer segment, industrial suppliers, did not like having to bid in highly competitive online markets, so they were actively trying to prevent FreeMarkets from growing.

Another potential segment, large company CEOs, were just not interested. They viewed new internet-deployed software for the purchasing department as just too “in the weeds.”   And within the lower levels of most large company purchasing organizations (another potential customer segment, the front-line buyers) any change in process was viewed as difficult and easy to resist.  Worse, the new approach and software was threatening to these front line employees because when FreeMarkets generated large savings, it had the potential to make them look bad (like they had been leaving money on the table for years.) But Meakem had the uncanny ability to capture and confront this emotion.

He explains, “The key to growing our business was selling our new technology and business process. Especially the savings that could be achieved, directly to the Vice Presidents of Purchasing.  We made these people heroes within their large companies (and in the eyes of their CEOs) because they delivered huge bottom line savings by leading their people in the adoption of our new technologies and processes.”

Meakem and his team acknowledged that change is hard, but the Vice Presidents of Purchasing were rewarded for making change and had the authority to force it within their purchasing groups.  By focusing on these key customers, FreeMarkets spread the message of savings from the adoption of their new technology to companies around the world.

“The forces opposing us at large companies and their suppliers just melted away,” says Meakem.  The rest as they say is history, replete with a landmark IPO and subsequent $500 million sale of the company to Ariba, all before Meakem’s 40^th birthday.

More recently, the entrepreneur has dived into another blue ocean, creating the world’s first permanent online sharable storage service, enduringly named Forever- www.forever.com.  In this venture, Meakem and his team also focused right away on figuring out the customer.  In this case, the endeavor turned out to be close to his heart because Meakem – the family man – saw his wife as the ideal buyer.

With trademark vigor he explains, “My team and I believe that literally everyone needs a Forever account, a permanent digital home for all their photos, documents and videos.  So there are many potential customer segments.  But when you really immerse yourself in this world, you realize that it is usually moms who are the most passionate about sharing and preserving family memories.”

At Forever, moms can collect, curate, and celebrate all their family memories now and for generations to come.  Meakem explains, “They can have unique digital rights – no advertising, no data-mining and we guarantee we will store their content and make it sharable for each customer’s lifetime plus 100 years.  This is completely unique and hard to replicate.”

With the same empathy he had for his purchasing customers, Meakem talks about his key customers at Forever. “Moms want to document and share the lives of their children and families, and they are under incredible pressure to save these memories for the long term.  They know that someday-many years from now-they will need to show photos or videos at all sorts of family events. From first communions, Bar Mitzvahs, graduations, rehearsal dinners to even funerals.  And this is not easy because people’s photos and videos are strewn all over computers, social media sites, mobile phones, back up devices, temporary cloud storage services, old boxes, photo books, DVDs, etc.  With file formats and devices constantly changing, it’s a mess.”

Meakem knows with certainty that moms are Forever consumers.  “They want family memories to be maintained and migrated to new file formats over time, where they know everything from baby pictures to photos of grandparents and ancestors will be findable and will never be lost.  Forever is the solution they need.”  The approach is working as the company is reportedly growing fast.

Meakem has founded and built a number of businesses in the course of his storied career. There may be a wide gap between procurement software and photo archiving, a whole ocean in fact, but the journey to success is exactly the same.  According to Meakem, success in business is built on this cornerstone: “Really, truly understanding your customer affects your product, operations, pricing, sales, and marketing…it will drive everything in your business.  Really listen to your customer – make your business really serve that customer, and you will succeed.”