We all remember our experience working our first “adult job,” you know, the one we go to college in hopes to become qualified enough to get. For me, that happened in May 2012, and the position was as Business Development Assistant for a fast growing SMB called Boréalis. When I told family and friends I turned down a job for a multinational that makes plane engines to take this position in an IT company that develops stakeholder engagement software, their first concern was: “What’s stakeholder engagement anyway? Why do people need a software to carry it out?” 2 very good questions I was not able to answer at that time. First reason being I did not completely understand the concept myself. Plus, it’s a pretty complex topic, and my being green to both IT and stakeholder engagement was not helping. To help people understand, I used an example many people can relate to explain the concept: I compared it to Customer Relationship Management. Of course stakeholder and customer management are similar concepts, but they’re far from being the same. The same goes for stakeholder engagement vs. customer relationship management software. I’d say it’s like comparing a toothbrush and a hairbrush. Although they’re both brushes, don’t try using one for the purpose of the other.
Starting with the Basics: Customer vs. Stakeholder
I’ve got a riddle for you: “If all my customers are stakeholders, all my stakeholders customers too. Right?” Well, the answer is NO! Even if a customer is a key stakeholder, key stakeholders (of a project or company) include a lot more than a customer base. Let’s look at the definition of each concept.
A customer is, according to Business Dictionary :
“A party that receives or consumes products (goods or services) and has the ability to choose between different products and suppliers.”
On the other hand, a stakeholder is, according to the IFC’s Stakeholder Engagement: A Good Practice Handbook for Companies Doing Business in Emerging Markets:
“Stakeholders are persons or groups who are directly or indirectly affected by a project, as well as those who may have interests in a project and/or the ability to influence its outcome, either positively or negatively. Stakeholders may include locally affected communities or individuals and their formal and informal representatives, national or local government authorities, politicians, religious leaders, civil society organizations and groups with special interests, the academic community, or other businesses.”
Just looking at the definitions highlights the different levels of complexity that apply to stakeholders. While customers generally have interest in buying a product/service and decision-making power, stakeholders don’t have to be interested in a project for it to have an impact on them, and they sometimes have decision-making power about it. The opposite is also true: a group of stakeholders could be highly interested in a project and yet have little to no saying in it. Even if the project means they have to relocate. But that’s a whole other issue in itself.
Managing Different Relationships, Built for Different Purposes
CRM software have been evolving at a fast pace in recent years, and it’s no surprise for people who are up to date with sales game changers such as social media, the Internet itself (online shopping is a big one here), inbound marketing, search engine optimization (SEO), etc. Although only the CRM systems that adapt to these new opportunities will remain industry leaders, the sales funnel itself hasn’t changed much. In a nutshell, the 4 basic stages of the buying process, still remain the same:
These stages represent well the linear sales pipeline (the client-vendor relationship management), which CRM software are build on.
Now when it comes to stakeholder engagement, the approach is quite different. As mentioned earlier, not all stakeholders are interested in a project, and not all stakeholders have as much weight on the decision-making process. That being said, all stakeholders must be taken into account if you want to build a solid engagement strategy.
Unlike the sales process, which is basically the same for all products (slight differences between B2C and B2B), stakeholder engagement strategies must be in line with the needs of each project. This means one company can have several engagement strategies for its different projects. Still according to the IFC, here are Tips for successful engagement:
If you’d like to know the 12 steps to prepare a solid stakeholder engagement plan, here’s an article that will spark your interest.
Rest assured, there’s a solution for you!
Boréalis online stakeholder engagement software is used by organizations around the world to successfully engage stakeholders and secure social license to operate in a wide range of industry sectors. To request a free custom demo of our software, contact us.