Suppliers Want You to Be Their Customer of Choice

Customer of ChoiceIs your company recognized by its suppliers as a Customer of Choice?  What exactly does this distinction mean and why is it important?  A Customer of Choice is a customer recognized by many of its suppliers as a preferred customer for a number of reasons.  From their talented workforce and integrated management systems to their global processes and approach to supplier collaboration, customers that can achieve this distinction can unlock new sources of competitive advantage with the help of their suppliers.

When suppliers recognize that they have a Customer of Choice on their hands, they have a tendency to go out of their way to service that particular customer’s needs.  In these situations, suppliers will assign their most talented employees, allocate scarce resources, provide additional discounts, prioritize production capacity, give early access to new products, and go out of their way to solve customer problems so that their customers can be more competitive in global markets.

According to a survey of senior sales executives, 75% of suppliers say that they prioritize preferred customers in situations where materials or services are in limited supply.  The same survey also showed that 82% of preferred customers consistently get early access to new products, services, ideas, and technologies.

Imagine the magnitude of these benefits of being in the Customer of Choice camp over a 5 year or 10 year period.   Reduced costs, new technologies, and key insights that your organization would receive early on and would not readily be shared with others in the market including your competition.

So how does your organization become recognized by its suppliers as a Customer of Choice?  It begins with an inward reflection and assessment of how your suppliers view you as their customer so that you can start to change behavior within your business.  Let’s look at 3 ways you can start to change behavior in your organization today so that you can also become a Customer of Choice.

Step 1: Put yourself in the shoes of your Suppliers
With the same due diligence and expectations that your organization sets for its suppliers, an organization must ask whether they hold themselves to the same standard of performance.  Ever heard the saying “if you’re going to talk the talk, you’ve got to walk the walk”?  Well, your suppliers have the same expectation of you as one of their customers especially in business-to-business markets.  If your organization can set the bar for how to manage your supply base, you’re moving one step closer to becoming a Customer of Choice.  Assess your current practices and the challenges you face with your suppliers with an unbiased and critical eye so that your team can uncover opportunities to improve how your organization communicates and works with your suppliers.  Your organization should also consider conducting anonymous supplier surveys, just as you would conduct employee surveys within your organization, to get feedback on what is and is not working well for your suppliers.

Step 2: Collaboration, Transparency, & Visibility
Old ways of managing suppliers that are labor-intensive, disparate, authoritative, and one-sided are not effective in the long run.  Global supply chains require information to be readily available and shared in real-time.  Changing the conversation from one of suppliers that must fulfill their contractual obligations to one of suppliers as strategic partners goes a long way to increasing engagement, ownership, and collaboration to solve tough problems as they arise.  Using modern integrated tools like Intelex’s Supplier Management solution help increase transparency and visibility within global organizations along with their suppliers.  Processes become standardized and easier to follow which helps to reduce variation in how supplier certifications, corrective actions, specifications for products, product management, and incoming inspections are managed.  Ultimately, these tools help employees at both the buyer and seller’s organizations focus their efforts on value-added activities that have a direct impact on customer satisfaction.

Step 3: Make Customer of Choice an Organizational Objective
Rather than rallying engagement around a special training event or workshop to kick off the concept of “Customer of Choice” that everyone forgets about the next week, organizations need to ingrain Customer of Choice as a corporate objective.  Establishing metrics that teams can use to monitor the company’s progress throughout the year helps move the needle towards realizing this goal.  Through self-assessments, supplier surveys, supplier complaints, and investing in projects that help improve the supplier experience with your organization, innovative opportunities to improve processes can be identified and acted upon.

To achieve any lasting change in an organization, what is most important is to achieve behavioral change so that the path to becoming a Customer of Choice becomes embedded in the thinking, training, processes, tools, metrics, and decisions used on a daily basis to achieve best-in-class supplier performance.

This entry was posted in Quality, Supplier Management and tagged , , , by Peter-Elias Alouche. Bookmark the permalink.

About Peter-Elias Alouche

Peter has primarily worked in the manufacturing and energy sectors with past experience in industrial inkjet systems, injection molding systems, electrical distribution, electrical transmission, and power generation, and database development. Over the last 14 years, he has learned about product design, inventory management, Quality Management, New Product Development, database development, and Project Management. During the summer months, you'll probably find Peter playing beach volleyball, at a golf course, or relaxing in a hammock. In the winter, he enjoys playing ice hockey, skating, skiing, ping pong, pool, and watching the Leafs. Always trying to learn new things by staying current with what's happening in business and technology by reading Popular Science, Harvard Business Review, Futurism, Tech Crunch, and Wired.

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