Price is critical even if you are a niche marketer, marketing cult brands. Traditionally we say the ‘Customer is King’. However, we know well that a business has more dependencies though; shareholders, employees, advertisers, channel partners, government and suppliers and managing all these relationships equally well is crucial for business success.
But honestly, how many of us spend enough time and put in a planned effort to ensure that these relationships are maintained well for optimum efficiency of the business.
Pause for a moment and take a count of losses due to stock-out situations you have experienced recently, which in turn affected your customer and other related issues, because you did not manage the supplier relationships well.
Value-chain analysis looks at every step a business goes through, from raw materials or any other input to turn out a product or a service to the end-user.
The goal is to deliver maximum value for the least possible total cost in the most efficient way to deliver the promise to the customer.
What if you make a paradigm shift and think everyone – I mean every partner, is your customer, not only those that pay you money for your products or service? Don’t we want every single partner in business to love our business and do their best?
Both sides of the fence
A good relationship will go above and beyond merely supplying an input. Most organizations predominantly focus on marketing to their current and prospective customers.
If they’re smart, they would realize how valuable supplier relationships are and steward them accordingly. How does your organization treat its suppliers?
Do you recognize them for their ‘On Time in Full’ quality supplies to take costs out of your business? Do you pay invoices on time or do you make them wait forever? Do you treat them as partners or do you think they’re a nuisance? How many organizations think about their suppliers when it comes to brand reputation?
Word of mouth works on both sides of the fence. Treat suppliers poorly, and they will talk negatively. Treat them with respect, like the partners they are, and they will talk positively.
Suppliers can be your best friend or your worst enemy. Marketers are interested in the vendor only when they want to get something from them. That’s not what relationships are meant to be.
‘Partnering’
Suppliers, at least your key ones, are essential to your success. While the word ‘partnering’ is grossly overused, developing strong and mutually beneficial relationships with your suppliers is something that you must strive to do.
Treat your suppliers like you treat your customers. You want your customers to come back for more; you should want your vendor relationship to encourage them to come back for more.
Dedicated supplier contact in your organization may come and go, so establish contacts within the ownership, executives, or at management level of your suppliers.
Let them know that they are important to you, and it will make it a lot easier to talk to the right person when you have a problem that needs to be resolved. Make sure that your vendors understand your business – both where it is today and where you hope to take it in the future.
Recognize that your suppliers will make mistakes — incorrect or late shipments, bad products, and more. While you can’t tolerate this, if it happens regularly, deal with it.
Good suppliers will make it right, just as you will with your customers, who are likely to forgive you if you have developed a good relationship with them. It’s OK to push for the best pricing you can from your suppliers.
But you need to make sure that they remain successful — and that means they must make money on what they sell to you. Pay your suppliers on agreed terms. If you can’t for some reason, call them.
They are more likely to better understand if you’re honest and upfront and if you have built a relationship with them.
It’s not acceptable to just avoid the subject, as you won’t accept that from your customers. If your supplier relationship is not strong then it may not last. Quality, pricing, convenience, or other reasons will end at some point. However, not to be dictated by the not so good suppliers, plan on having other potential suppliers lined up to be ready to replace the existing.
Thinking and acting on the premise that ‘everyone is a customer’ will help you grow.