Let’s start by defining exactly what a stakeholder is. In a business setting, a stakeholder is anyone or any entity that has a financial interest in the company. They can both affect the business and be affected by the business’s performance. In many cases, a stakeholder has invested a certain amount of time and/or money into a company and expects a financial return on their investment. Not many smaller retail businesses will require such stakeholders, but as your business grows, this will likely change.
But not all stakeholders are traditional investors or shareholders. Rather, stakeholders come in various shapes and sizes and are not simply reserved for major corporations. Smaller businesses can have smaller stakeholders. And the definition of a stakeholder has expanded to include employees, customers, suppliers, communities, and even governments. After all, these all may have a level of vested interest in a company.
But how can small businesses navigate their stakeholders, what is stakeholder management, and how do you know if your retail business is operating in the right ways? Check out the rest of this blog to learn more about retail stakeholders and why it matters for your business.
What Is Stakeholder Management?
Stakeholder management is the practice of planning, optimizing, organizing, and improving the relationship between a business and its stakeholders. A thorough approach to stakeholder management doesn’t just manipulate your stakeholders. Rather, it should be a holistic approach of fostering better relationships with all of your stakeholders.
Who Are Stakeholders in Retail?
Stakeholders consist of anyone who is impacted by the success or failure of a certain business. They can be internal parties (such as employees) or external parties (such as suppliers). Traditionally, stakeholders consisted of those who had financial investments in the company as an investor or shareholder. While these individuals are certainly still stakeholders, the definition has been broadened.
Stakeholders now include customers, all employees, and the community around the business. Your shoppers have an interest in the success of your brand because they desire a continued positive shopping experience. Your employees invest their hard work in your business and are invested in maintaining their job stability. And communities are invested in a healthy local business environment that attracts more residents and financial investment into the area.
Stakeholders vs. Shareholders
Simply put, all shareholders are stakeholders, but not all stakeholders are shareholders. A shareholder has a financial interest in the success of the company, while a stakeholder might not.
Plus, a shareholder can usually sell their share or stock in a certain company, voiding any long-term reliance they might have on the business. Not all stakeholders are able to do so. For instance, a supplier or an employee could be a stakeholder, but if the business decides to no longer use that supplier or terminate that employee, their losses are much more significant than the shareholder.
What Are the Benefits of Stakeholder Management?
Good stakeholder management is a vital step in maintaining a strong relationship with various individuals and entities that are vital to the success of your business. The importance of stakeholder management can clearly be seen by understanding the risk of not having a plan in place – unhappy staff, diminishing customer base, lackluster investor returns, etc.
Overall, good stakeholder management fosters better working relationships and helps the business reduce wasteful costs and increase overall value. In turn, the business gains a better reputation, a stronger competitive advantage, more efficient risk management, and more organized governance.
Below are a few more specific examples of the benefits of stakeholder management:
- More predictability – plan ahead and have a better idea of your future
- Increased engagement – motivate your employees to work harder and your customers to shop with you more often
- Understand needs – know who needs what and when they need it
- Keep people happy – improve organization and communication to keep all parties happy
- Plan expectations – anticipate if you’re falling behind schedule or going over budget
What Is a Stakeholder Management Plan in Retail?
A stakeholder management plan outlines various management strategies for running a successful retail operation. A good plan is strategic and detailed, and helps ensure that your business meets certain goals and expectations.
In a retail environment, a stakeholder management plan is typically created by management or ownership.
Start by creating a ranking of all stakeholders by their ability to affect the outcome of a certain project or the success of your business overall. Next, identify all stakeholder expectations. Understand how they prefer to communicate and what their goals are. Finally, set the plan into action by creating steps to ensure that business runs smoothly and expectations are met.
To help devise a plan, think about using a stakeholder management template. Make sure you’re planning well ahead of time, so you have the freedom to adjust the plan as needed. Monitor the plan regularly and don’t be afraid to update it once it’s live. Try to plan for problems that might arise, and allow for constructive feedback from your team. Transparency and clarity are vital.
Do You Need Stakeholder Management Software?
Depending on the type of business you have, it might be worth investing in stakeholder relationship management software (SRMS). This type of software often comes in lieu of a customer relationship management software (CRM), but some businesses will have both.
While both a CRM and an SRMS can effectively track stakeholders, an SRMS is more about tracking the engagement of each stakeholder than it is about managing the sales process.
Managing Your Retail Store in a Better Way
As your store continue to scale, be proactive about putting the right pieces in place before it’s too late. It’s always easier to plan ahead than it is to play catch up. The same goes for your retail POS. Invest in a system that will allow your business to succeed in the long-term with better inventory management, product and sales reporting, in-depth analytics, employee engagement, and more.
To learn more about KORONA POS, click below to start a free trial and schedule a personalized product demo.