Every supplier, B2B and B2C, is desperately looking for customer loyalty. What about those suppliers that want the last ounce of “advantage” both coming, and going? You know who I talking about, don’t you?
I’ll never forget an experience I had while visiting an ice manufacturing plant in Southern California . I was visiting the plant in preparation for delivering a multi-day marketing workshop at the industry’s annual convention. I wanted to get a “feel” for the industry first hand.
The owner was out so his second in command gave me a factory tour. Over the course of the tour, my guide was basically whining about their lousy customers that would buy from another company if they were late with deliveries. I listened intently and empathetically to him.
Toward the end of the tour, checking out the ice bagging machinery, I asked my guide about the bag supplier. Holy cow! This guy’s face turned sheepish when he told me that they play one supplier against another for the best possible price.
What’s In Your DNA?
Apparently supplier loyalty was not in the DNA of this ice manufacturer. However, they expected loyalty from THEIR customers. Is it just me? Or, can you see the cosmic humor in this situation? This organization wanted to squeeze the last drop of “advantage” from the economy—they wanted it both ways. It’s kind of like the folks that regularly shop at Wal-Mart and then complain that all the American jobs are being sent overseas. Duh!
Only Ebenezer Scrooge was able to squeeze at both ends, until of course he was visited by the ghosts of Christmas—an important metaphor for business. Might the ghosts of Christmas really be the economy? Might the cosmic pay-back arrive in the form of new competitors? Who knows—yet it is worth pondering.
What’s a Business Leader to Do?
- If you want loyalty from your customers, practice the concept of loyalty in your dealings with suppliers.
- If you discover that adversary relationships are in your organizational DNA, put new policies into place to mitigate the situation.
- If you want collaborative DNA at the core of your organization, review how your key people are being compensated.
- Reward the behavior you want repeated—meaning, do not reward the procurement department only for squeezing an additional dime out of your suppliers. Rather, build strategic sourcing relationships.
Now, Perhaps You Can Receive
After you do a major overhaul in the area of supplier treatment, you can use your newly found strategic sourcing understanding to develop better relationships with those customers you feel are capable of partnering. In difficult economic times, everyone is looking for a deal. However, the customers that somehow see you as their partner are the place to start in building a new era of loyal relationships.
Ed is the Founder and CEO of the 501(c)(3) non-profit public charity, Cigar PEG Philanthropy through Fun, and president at Rigsbee Research which conducts qualitative member ROI research and consulting for associations and societies. He has been called “the dynamite that broke up our log jam” by association executives—rarely politically correct and almost always provocative—and from a dozen years as a United States Soccer Federation referee, Ed calls it the way he sees it. Exceptional resources at www.rigsbee.com.
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