Do your suppliers recognize your company as a Customer of Choice? What does this distinction mean and why is it important? A Customer of Choice is one that suppliers consider a preferred customer for a number of reasons, such as having a talented workforce, using integrated management systems and global processes, and having innovative approaches to supplier collaboration. Customers that achieve this distinction unlock new sources of competitive advantage because of their suppliers.
When suppliers recognize that they’re working with a Customer of Choice, they often make exceptional efforts to meet that customer’s needs. In these situations, suppliers often assign their most talented employees, secure scarce resources, provide additional discounts, prioritize production capacity, give early access to new products, or go out of their way to solve the customer’s problems and help them be more competitive in global markets.
Preferred Customers Get Special Treatment
According to a survey of senior sales executives, 75% of suppliers say that they prioritize preferred customers when 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 benefits of being the “Customer of Choice” over a 5-year or 10-year period, such as reduced costs and new technologies. The supplier can also give you exclusive key insights to which your competition would not have access – which ties into building an effective Collaborative Planning and Forecasting Replenishment (CPFR) process.
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 your organization’s behavior. Let’s look at 3 things you can do to become a Customer of Choice:
Step 1: Put Yourself In Your Supplier’s Shoes
You must examine whether or not you hold yourself to the same expectations and standards of performance as you do your suppliers. Have you 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 they have for their customers. 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 you can uncover opportunities to improve how your organization communicates and collaborates with your suppliers. You might even consider conducting anonymous supplier surveys in the same way you conduct employee surveys within your organization so that you can learn what is and is not working well for your suppliers.
Step 2: Enhance Collaboration, Transparency, & Visibility
Old ways of managing suppliers are manually intensive, disparate, authoritative, one-sided, and subsequently ineffective. Global Supply Chains require information to be readily available and shareable in real-time. Changing the conversation from one in which suppliers simply 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.
Using modern integrated tools like Intelex’s Supplier Management solution helps to increase transparency and visibility within global organizations and with their suppliers. Processes become standardized and easy to follow, which helps reduce variation in managing supplier certifications, corrective actions, specifications for products, product management, and incoming inspections. Ultimately, these tools help employees at both the buyer’s and seller’s organization to focus their efforts on value-added activities that impact customer satisfaction.
Step 3: Make Customer of Choice an Organizational Objective
Rather than rallying employee engagement around a soon-forgotten special training event or workshop dedicated to the concept of “Customer of Choice”, organizations must engrain Customer of Choice within corporate objectives. Establishing metrics that teams 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, you can identify and act on innovative opportunities to improve processes.
To achieve any lasting change in an organization, you must encourage behavioral change so that the path to becoming a Customer of Choice becomes embedded in the thinking, training, processes, tools, metrics, and decisions you use on a daily basis to achieve superior supplier performance. The benefits of being a preferred customer are clear – and when things go wrong causing supply to be constrained (and at some point they will), it can be a Godsend.