{"id":3108,"date":"2017-08-15T08:44:03","date_gmt":"2017-08-15T13:44:03","guid":{"rendered":"http:\/\/flevy.com\/blog\/?p=3108"},"modified":"2017-07-31T10:04:18","modified_gmt":"2017-07-31T15:04:18","slug":"do-your-key-customer-accounts-consider-your-organisation-to-be-an-ideal-supplier-maybe-its-time-to-find-out-part-i","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/do-your-key-customer-accounts-consider-your-organisation-to-be-an-ideal-supplier-maybe-its-time-to-find-out-part-i\/","title":{"rendered":"Do Your Key Customer Accounts Consider Your Organisation to be an \u2018Ideal\u2019 Supplier? Maybe it\u2019s Time to Find Out! (Part I)"},"content":{"rendered":"<p><img decoding=\"async\" class=\"alignright size-medium wp-image-3109\" src=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2017\/07\/customer-service-1433642_960_720-300x300.png\" alt=\"customer-service-1433642_960_720\" width=\"300\" height=\"300\" srcset=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2017\/07\/customer-service-1433642_960_720-300x300.png 300w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2017\/07\/customer-service-1433642_960_720-150x150.png 150w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2017\/07\/customer-service-1433642_960_720.png 720w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/>While much has been said over the years about customer-supplier relationships, organisations still don\u2019t seem to get it right often enough.\u00a0 If we\u2019ve heard the phrase, \u2018No organisation is an island\u2019 once, I\u2019ve heard it a thousand times and it\u2019s true.\u00a0 One of the vital few factors for long-term competitiveness of <strong>any<\/strong> organisation is having <strong>exceptional relationships with the right suppliers<\/strong>.<\/p>\n<p>Over my 42 years of experience around the world having worked with over 160 organisations from Shell to Electrolux to IBM, Xerox, Royal Bank of Scotland, Johnson &amp; Johnson and the list goes on. During those experiences, I\u2019ve had the opportunity to go out and conduct in-depth face-to-face interviews with these organisation\u2019s key strategic customers (B2B).\u00a0 When I conduct that interview I utilise a unique tool I developed called a \u2018Relationship Review\u2019.\u00a0 I won\u2019t go into details on the contents of that instrument now, but save it for a later article. I will say however, that every time I have done this, the customer decision makers, decision influencers and users\/user groups (when appropriate) have told me how much they enjoyed and appreciated the experience and the opportunity to share their views in an open and honest way. They also tell me that this interview has reflected very positively on the supplier as being an organisation willing to spend money on a consultant to do this and discover the truth.\u00a0 Their only concern?\u00a0 Will the supplier organisation (my client) take action? This is absolutely critical otherwise the trust and confidence built up during the interview process will be lost.<\/p>\n<p>Suffice to say, that in addition to being a tremendous source of ideas for innovation, these key strategic customers generally tell it the way it is \u2013 no sugar coating.\u00a0 If they think the job your organisation \u2013 the supplier organisation is doing is \u2018crap\u2019 they tell you and why.\u00a0 They don\u2019t hesitate to tell you who is their best supplier and why \u2013 that is, how your organisation stacks up to its competitors.\u00a0 They are without a doubt a great and reliable source of competitive intelligence. <strong>Please note that this interview must not be conducted by the sales staff if you want to gain truthful insight from your key strategic customers and hope to really strengthen the relationship you have with them! Use someone from your staff who is \u2018neutral\u2019 or use a 3<sup>rd<\/sup> party organisation.<\/strong><\/p>\n<p>After having conducted many thousands of interviews with at least 3 individuals or more in each customer organisation &#8211; key decision-makers, decision influencers and\/or frontline personnel, users\/user groups (as appropriate) who are in regular contact with your organisation almost daily, these key strategic customers paint\u00a0 a consistent picture of the \u2018vital few\u2019 characteristics &#8211; the \u2018profile\u2019 of an \u2018ideal supplier\u2019. Allow me to share what I have learned are the 10 \u2018vitally important\u2019 factors that can make all the difference in building an exceptional relationship with your best customers by being the \u2018ideal supplier\u2019:<\/p>\n<h2><strong>Always being \u2018easy to do business with\u2019<\/strong><\/h2>\n<ul>\n<li>Simple, easy, uncomplicated <strong>as the customer perceives it<\/strong>\n<ul>\n<li>Some years ago working with ABB (Asea Brown Boveri) I was involved in a survey of B2B customers who had either defected or reduced purchases.\u00a0 The results of the survey showed that 70% of them did so because ABB was \u2018not easy to do business with\u2019<\/li>\n<\/ul>\n<\/li>\n<li>Having a single point of contact can be helpful; having bills of lading which are not in hieroglyphics (as Motorola once had); having inter-linked systems to see product availability and so on are just a few<\/li>\n<li>Being \u2018easy to do business with\u2019 adds value and strengthens the relationship<\/li>\n<li>It also means that your business processes are efficient \u2013 no redundancy, minimum downtimes\/bottlenecks, each step in the process adds value \u2013 reducing your cost of doing business with customers and <strong>more importantly the \u2018customer\u2019s cost of doing business with you<\/strong>\u2019!<\/li>\n<li>Keep in mind that every customer incurs two costs of doing business with your organisation.\u00a0 One is the \u2018<strong>economic<\/strong>\u2019 cost \u2013 \u2018what do I have to pay to get what I want\u2019.\u00a0 The other cost is \u2018<strong>emotional<\/strong>\u2019 \u2013 \u2018how much <strong>pain<\/strong> do I have to tolerate to get what I want\u2019.\n<ul>\n<li>You can have the highest quality product at the cheapest prices in the world, but if the customer has to incur too much pain to get it, they will defect \u2013 guaranteed. One day I will share my experience with BT (British Telecom) when I had my business in the U.K.! Ouch!!!!!!!!!!!!!!!!!!<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Being\u00a0 viewed as an \u2018innovative\u2019 supplier and providing creative solutions<\/h2>\n<ul>\n<li>To begin, it means more than just copying the competition! However, if you perceive that you need to include what they do in your portfolio, but go at least one step further and innovate on what they have do, so be it.<\/li>\n<li>All innovations should generate \u2018value\u2019 where I define \u2018value\u2019 as the sum total of all benefits \u2013 intangible and tangible which accrue when the customer (or stakeholder) does business with you. As such, \u2018value\u2019 represents a source of differentiation and competitive advantage<\/li>\n<li>It means that the customer must view you as an organisation and a \u2018team\u2019 which is committed to helping them, the customer, be more successful.\u00a0 Yes, mutual success model but skewed toward the customer.<\/li>\n<li>There are some 8 sources of innovation and 10 sources of value \u2013 all of which need to be explored.\u00a0 Normally organisations fail to do a thorough job here often focusing on their comfort zone or practicing \u2018myopia\u2019 by confining themselves to 2-3 sources in either case \u2013 sources of innovation or sources of value.\u00a0 Don\u2019t limit yourself if you expect to compete for a place in the future and create \u2018secure\u2019 relationships with customers and other stakeholders \u2013 meaning creating organisational relationship with key customers that are so strong that they would not leave you even upon penalty of death!<\/li>\n<li>In my book, \u2018<strong>The Wisdom Chronicles: Competing to Win\u2019<\/strong>, I have two chapters devoted to the concept of \u2018value\u2019 and also discuss innovation.\u00a0 In fact I define <strong>the true purpose of any business as being \u2019the creation and delivery of value to all key stakeholders\u2019<\/strong><\/li>\n<\/ul>\n<h2>Decision-making is perceived as being very fast<\/h2>\n<ul>\n<li>Here it needs to be the case that all people involved with the customer \u2013 sales, service, technical support \u2013 whomever, are viewed as being <strong>empowered<\/strong> to act in the best interest of the customer except in potentially exceptional circumstances, e.g., in the medical area, your dialysis machine the customer has at home fails and a patient meets an untimely death; an organisation faces severe downtime \u2013 loss of revenue for what the customer perceives as being either unnecessary or for a prolonged period as a result of some issue \u2013 don\u2019t make your problem the customer\u2019s problem!\n<ul>\n<li>Fear and intimidation needs to have been removed from the organisation so the employees feel they can <strong>take initiative<\/strong> on behalf of the customer or to make process improvements or more, otherwise empowerment cannot work<\/li>\n<li>Said more clearly, decision-making needs to be pushed down as far as possible in the organisation \u2013 closest to the customer<\/li>\n<li>I have conducted \u2018empowerment\u2019 programmes for organisations such as Xerox.\u00a0 The Headquarters was in Toronto and the \u2018pilot\u2019 was done as far away as possible \u2013 in Vancouver.\u00a0 Management was scared to death that frontline employees would \u2018give away the farm\u2019 and wanted to continue to play (along with supervision and first line managers) the role of sheriff or policeman\n<ul>\n<li>Discussions with frontline employees were held in focus groups with admin, service and sales.\u00a0 Frontline people were asked, \u2018How much authority do you think you need to have to make 80% of the customer issues go away? The answer was $250. And it worked! We allowed 20% maximum of issues to be escalated to first level management or supervision and virtually nothing had to go beyond that.\u00a0 Both first line management and supervision needed their training as well \u2013 on how to \u2018turn in their badges\u2019 and how to \u2018coach\u2019 frontline or recognise them for a job well done \u2013 everyone learning from the experience through sharing sessions of \u2018best and worst\u2019 experiences at staff meetings.<\/li>\n<\/ul>\n<\/li>\n<li>The fact is that \u2018empowerment\u2019 can never take root in an organisation where there is too much control or lack of trust with management.\u00a0 In such an environment, even if you empower frontline, most them will not use it as they are afraid they will be beaten up for doing too much or that senior management will just \u2018turn off the faucet\u2019\u00a0 anyway, so best to not get used to having the added decision-making capability.<\/li>\n<li>Facts are that in Motorola and Xerox \u00a0I saw was that senior management who often made the worst decisions! Whenever a customer complaint reached their desks they would be heard to scream \u2018make it go away\u2019 and so the word would come down from upon \u2018high\u2019 to fix it no matter what it took. Frontline employees took a much more reasoned approach based on all the critical factors which should have been considered, but which were blatantly ignored by senior management!<\/li>\n<li>In my experience, frontline employees knew the customer far better, had a better relationship and made a better decisions time after time than senior management!<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Reliability<\/h2>\n<ul>\n<li>Doing it right the first time, every time, on time!<\/li>\n<li>You might call this a \u2018hygiene factor\u2019 as it relates to getting the routine things done and done almost flawlessly on a consistent close to a 6-sigma (3.4 defects per million opportunities)\u00a0 basis such as on-time deliveries, on-time service calls, complete deliveries, accurate and timely invoices, returning emails or telephone calls and so on\n<ul>\n<li>Guaranteed, consistent failure to get it right consistently in these \u2018basic needs or hygiene\u2019 areas will result in customer defection.\u00a0 Customer trust and confidence will erode.\u00a0 They will think to themselves, \u2018Wow, if this organisation can\u2019t even get it right on a regular basis with the simple things, why should we trust them with more important issues?<\/li>\n<li>I remember a case where the President and senior staff of a Division of Corning which made laptop computer screens went to Japan to speak with the CEO and senior staff of Toshiba.\u00a0 The Corning CEO stood up and began to say that they were there in the hope of building a stronger business relationship with Toshiba.\u00a0 Before he could finish, the CEO of Toshiba stood up and asked the Corning CEO to be seated.\u00a0 The Toshiba CEO went on to say, \u2018your deliveries are always late, your invoices are always incorrect\u2019.\u00a0 Until such time as you can show us you can handle these routine issues correctly, first time, every time and on time, we do not wish to increase our dependency on your organisation\u2019.\u00a0 End of story!<\/li>\n<li>The moral of the story?\u00a0 To build a loyal and certainly a secure relationship with customers you have to earn it by laying a foundation of being flawless on the basics \u2013 the routine things.\u00a0 The customer expects it and you had better deliver!<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Having people with the right attitudes, knowledge and skills or competencies<\/h2>\n<ul>\n<li><strong>People do make the difference<\/strong> whether senior management always chooses to believe it or not<\/li>\n<li>In fact, while many factors, as indicated in my book, \u2018The Wisdom Chronicles: Competing to Win\u2019 are critical, it may well be that <strong>in the final analysis, people are not only an organisation\u2019s most precious asset, but it most important source of competitive advantage<\/strong>.<\/li>\n<li>Your people (<strong>partial list only<\/strong>) can distinguish your organisation \u2013 differentiate it from others by being viewed or engaging in these and other behaviours:\n<ul>\n<li>More technically oriented<\/li>\n<li>Possessing relationship skills<\/li>\n<li>Understanding the customer better than the competition<\/li>\n<li>Understanding their own organisation better<\/li>\n<li>Acting as trusted advisors<\/li>\n<li>Acting as solutions providers and therefore valuable resources<\/li>\n<li>Taking a more consultative approach rather than just a \u2018get the order\u2019 approach<\/li>\n<li>Building trust and confidence consistently<\/li>\n<li>Showing that they care<\/li>\n<li>Having a willingness serve \u2013 an attitude of service<\/li>\n<li>Unafraid to go the extra mile \u2013 being an advocate for the customer<\/li>\n<\/ul>\n<\/li>\n<li>It is your frontline people who build or destroy relationships with customer \u2013 not senior management.\u00a0 However, senior management needs to be out interacting with and building relationships with their peers in customer organisations. Just think for a moment, \u2018How many interactions occur between your people and customers every day in your organisation?\u00a0 How many of these interactions strengthen the relationship?\u00a0 How many weaken it? I have seen surveys of customer satisfaction in electric utilities where the more calls a customer made to customer service, the lower the customer satisfaction became!\u00a0 You don\u2019t want this in your organisation! This phenomenon even exited at Xerox at one time. At the same time one needs to be concerned about consistency.\u00a0 While Compaq Computer had 8 call Centres, Siemens had almost 100 around the globe.\u00a0 Customer expect the same level of service excellence no matter which one is called.\n<ul>\n<li>In fact, I can guarantee you that even today I can walk into any organisation and find that at least half of the leadership team, if put in front of a customer and asked to conduct a discussion to strengthen the relationship, would, in fact, act as a lethal weapon and damage the relationship instead.\u00a0 Why?\u00a0 Because few senior executives possess \u2018relationship mastery\u2019 \u2013 something I will discuss in future articles.\u00a0 In part, this is due to the fact that the succession planning of most organisations is just dead wrong \u2013 if they even have one. Few of them ensure that high-potentials are given experiences at different levels in their career to interact with customers from working in a call centre to being an account manager.\u00a0 They are \u2018out of touch\u2019 with reality and the true voice of the customer too often and for too long.<\/li>\n<li>Xerox, AT&amp;T Universal Card Services and other world-class organisations mandate that senior executives take calls from customers \u2013 for information and complaints, in that organisation\u2019s call centre \u2013 a practise which is guaranteed to \u2018shift paradigms\u2019 and \u2018change mindsets\u2019. They ride with sales managers, they engage in \u2018back to the floor\u2019 experiences along with other learning and development activity.<\/li>\n<\/ul>\n<\/li>\n<li>Yet, you would be surprised how senior management answers the following question most often when I ask: \u2018If you had the choice between great people and mediocre business processes or mediocre people and great business processes, which would you pick?\u2019 Most often they pick business process! WRONG! Great people are going to find a way to work around dysfunctional processes, make heroic efforts to satisfy the customer and ultimately, if empowered, fix the processes to make them better or best practise.<\/li>\n<\/ul>\n<p>In Part I, we have covered the first five (5) characteristics of what defines an \u2018ideal supplier\u2019 based upon thousands of interviews with key customer accounts of well-known organisations around the world.\u00a0 The results have been very consistent.\u00a0 Find out the remaining five (5) key characteristics in <a href=\"https:\/\/flevy.com\/blog\/do-your-key-customer-accounts-consider-your-organisation-to-be-an-ideal-supplier-maybe-its-time-to-find-out-part-ii\/\">Part II<\/a>.<\/p>\n<p>In the meantime, have each member of the leadership team rate your organisation on the five characteristics above for one of your most important key customer accounts.\u00a0 Use a scale of 1-5 where 1 = poor and 5 = excellent. Compare and discuss results \u2013 differences especially \u2013 converge on what the leadership team as a \u2018team\u2019 considers reality to be. <a href=\"https:\/\/flevy.com\/blog\/do-your-key-customer-accounts-consider-your-organisation-to-be-an-ideal-supplier-maybe-its-time-to-find-out-part-ii\/\">When Part II is available<\/a>, I would suggest you do the same.<\/p>\n<p>Then you should go out face-to-face with key decision-makers, decision-influencers and users\/user groups (if appropriate) in <strong>at least 3 of your key customer accounts<\/strong> \u2013 <strong>picking one that is not happy with you<\/strong>.\u00a0 <strong>Prepare your scores first and then compare their scores with yours<\/strong>.\u00a0 Get together with them and discuss the differences and the root causes of those differences.\u00a0 It is a powerful exercise which works incredibly well based upon my experiences over the past 42 years and will build stronger relationships.<\/p>\n<div class=\"aside\">See Dr. Marra\u2019s most recent book <a href=\"http:\/\/www.amazon.com\/Competing-Win-Organizational-Performance-Chronicles\/dp\/1634620062\">Competing to Win<\/a> for more information on <a href=\"http:\/\/www.amazon.com\/Competing-Win-Organizational-Performance-Chronicles\/dp\/1634620062\">Amazon here<\/a>.<\/div>\n","protected":false},"excerpt":{"rendered":"<p>While much has been said over the years about customer-supplier relationships, organisations still don\u2019t seem to get it right often enough.\u00a0 If we\u2019ve heard the phrase, \u2018No organisation is an island\u2019 once, I\u2019ve heard it a thousand times and it\u2019s true.\u00a0 One of the vital few factors for long-term competitiveness of any organisation is having&hellip;&nbsp;<a href=\"https:\/\/flevy.com\/blog\/do-your-key-customer-accounts-consider-your-organisation-to-be-an-ideal-supplier-maybe-its-time-to-find-out-part-i\/\" rel=\"bookmark\"><span class=\"screen-reader-text\">Do Your Key Customer Accounts Consider Your Organisation to be an \u2018Ideal\u2019 Supplier? Maybe it\u2019s Time to Find Out! (Part I)<\/span><\/a><\/p>\n","protected":false},"author":100,"featured_media":3109,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[82],"tags":[],"class_list":["post-3108","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-operations"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/3108","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/100"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=3108"}],"version-history":[{"count":2,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/3108\/revisions"}],"predecessor-version":[{"id":3114,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/3108\/revisions\/3114"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/3109"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=3108"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=3108"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=3108"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}