The phrase “the customer is king” is well known, you don’t hear words like this when procurement people talk about suppliers. It is no coincidence that companies that really value their customers also treat their suppliers well.
Influencing and persuasion skills are competencies that both procurement executives and their stakeholders need to develop to be successful in creating fully workable supplier relationships. For this, they need to follow the lead of their marketing and sales colleagues, Elaine Porteous tells SmartProcurement.
Engaging with customers
It seems that companies put much more effort into securing and retaining customers than they do into managing their suppliers. Both customers and suppliers are vital to your long-term business success. Suppliers can also walk away.
Let us look at how great companies engage with customers.
1. Under-promise and over-deliver
Sales people must listen well, understand the actual requirements and be responsive to their customers’ needs. Knowing that you can fulfil his needs, and more, means that you have the comfort of knowing that the elusive “customer satisfaction” is possible.
So can we listen to our suppliers, identify their actual (not assumed) problems and issues and respond to them appropriately?
2. Make it easy for the customer to do business with you
The best examples of companies that do this are those that offer multiple ways for you to work with them, depending on your preference. These ways can include e-mail, telephone, fax, mail, website transactions and mobile apps. Over and above all these options, the customer also wants to connect with a real person.
Make it easy for the supplier to do business with you.
I hear lots of complaints about unresponsive and rude procurement managers.
In many organisations with multiple supplier touch points, it is a bit of a nightmare for the supplier to get answers or solve his problem. Why not explain to the supplier exactly who they can talk to for support? Contacts in your organisation may come and go so establish links and open lines with your senior management. The worst error you can make is to use voicemail or let the phone ring and ring.
3. Develop trust and be honest
Communicate honestly, directly and clearly with customers. Be prompt in your responses and, where possible, use the same style of communication. Do not lie or fudge the truth.
Building a solid supplier relationship is a journey, not an event. If you work consistently with a supplier on cost reduction or value-adding solutions, their responses will be fair and realistic. Being dishonest or dismissing their suggestions without due consideration, is not only counter-productive, it is just bad manners.
4. Recognise the importance of customers in your business
Every employee plays a role in how customers view your company. The expectation is that all employees should behave in a manner that is professional, polite and responsive.
I think we owe it to our suppliers to give them the same amount of respect. Word of mouth is powerful; if you treat suppliers poorly they will talk negatively about you to your customers. Contracts and service level agreements should be clear and fair to both sides with no interpretation needed. Performance measures should be agreed upfront and we must give honest feedback to ensure a continued sustainable relationship.
Companies ranked best in customer service
A recent survey in the US ranked about 150 brands by customer satisfaction from a survey of more than 1 500 consumers; the top 10 in the Hall of Fame included Samsung Electronics, Fedex and Amazon. It is no coincidence that these companies are also highly rated for their commitment and behaviour towards their suppliers. Here’s what they say:
Mutual development with our business partners is a key element to elevating Samsung Electronics into a top-notch global corporation. We believe the best strategy to achieve our vision of becoming a true global leader is to strengthen our business partners’ competitiveness and pursue co-prosperity through win-win partnerships.
Samsung Electronics
Worldwide, FedEx suppliers play a critical role in supporting our operations. Meeting the demands of a global marketplace and an unparalleled global supply chain network requires the highest standards of efficiency and effectiveness.
Our suppliers understand this mandate and rise to the occasion by providing the commodities, services, ideas, and solutions we need to deliver daily on our promises to customers while continuously finding ways to reduce our costs.
FeDex
On the other hand, big banks again dominate the list of 10 companies that make up their Hall of Shame. Do they not care about their customers or are they simply too big to please? It would be interesting to know how the big global banks treat their suppliers.
Traditional methods of supplier “management” through fear and threat are, hopefully, in decline. Banging the table and screeching for another cent of cost savings is increasingly rare behaviour.
How does your organisation treat its suppliers?
The author, Elaine Porteous is a business writer and commentator on supply chain issues. Contact her through her website www.elaineporteous.com.
Reference: Zogby Analytics in the US, in partnership with MSN, recently released its seventh annual customer service survey.
