Imagine you are chief executive of a small quoted company and have just picked up a valuable contract from a well known FT-SE 100 company. You know it will make your shareholders and your rivals sit up and take notice. You prepare a press release but are told that you cannot use the name of the company concerned.
The situation is immensely frustrating but happens all too frequently. The reasons for the coyness displayed by your new customer are usually pretty straightforward, such as:
- It may not want its competitors to know what it is doing,
- It may already have relationships with similar suppliers to you and would prefer not to let them know it was dealing with another company in the sector; and
- It may think you will try and generate unnecessary publicity out of your association with a well-known brand
The result is that you are left powerless to take advantage of a situation which brings enormous credit to your company and may very well attract further business. How much more capital you could have extracted from the announcement by telling everyone that you are now going to be selling to Shell, Marks & Spencer or Tesco!
But all is not lost. With a little careful planning you can put yourself in a stronger position to benefit from winning a contract or forging a new relationship with a well-known name or brand.
These are the steps I believe the chief executive of a smaller company should take to deal with this situation:
- On entering a new supplier relationship with a larger company, stipulate that you want to be free to seek publicity
- Make clear that any announcements will be handled responsibly and you will do nothing to damage the reputation of the company or its brand. Show examples of press releases issued on your behalf to demonstrate the way you have treated stories in the past
- Explain that you and your public relations advisors will drive the process, preparing the release and all the relevant information before seeking approval for the final draft from your customer
- If your partner does not agree, say you would like each future announcement to be reviewed on a case by case basis – it is unlikely the company will impose a complete blanket ban
Despite all these approaches, however, you will have to accept those frustrating occasions when your hands are tied and your partner insists on NO PUBLICITY!
So, a formal announcement is released and investors in the small company will be left clueless to the identity of the 'major food company' or the 'European prestige car manufacturer' with whom you are now doing business. But all is not lost.
There is still information you can bring to the attention of your shareholders which should benefit your company in the long term. For instance, you could mention a number of potential benefits to flow from the new contract or commercial arrangement such as:
- The possible sales impact of the contract,
- Whether the deal takes you into any new territories here or overseas
- The additional boost to margins which could flow from the arrangement
- Whether you are now entering any new product segments
- Remind investors of your existing client base, especially if they are blue chip
In other words, don't be put off if you are unable to spell out all the glorious details of the contract you have just won. Use your best endeavours to convince your new partner that sensible publicity can be in the best interests of all parties. But if that is not possible, then concentrate on issuing an announcement which is punchy and conveys the commercial implications of the news.
You can also use the opportunity to bring investors up to date with current trading if that seems appropriate to your financial advisors. Remember, today's investors are looking for companies that deliver fundamentals like steady profits and earnings per share growth, rather than hype and exaggerated claims.