Relationships build revenue. Over five years ago Darren Dahl published an article for Inc. reinforcing the value of mutually beneficial business relationships. Supplier preference is no different. That’s why many organizations implement supplier relationship strategies. Doing so makes it easier to achieve supplier preference, and most importantly, improve profit.
So what is supplier preference?
Supplier preference is a strategy that utilizes data and technology to cultivate strong relationships and loyalty between customers and their suppliers. Strengthening these relationships creates a lifecycle that grows revenue: the better a supplier knows its customer, the better positioned it is to provide relevant solutions. Better solutions lead to happier customers and stronger supplier relationships.
In Dahl’s article from 2011, Michael Denisoff, founder and CEO of Denisoff Consulting Group shared his wisdom from years of developing strong [and weak] business relationships:
“You need to have long-term customers and good vendor relationships that will carry you through challenging times or tight deadlines, as well as relationships with other business owners to share struggles, resources and best practices that can really give you an edge. The reality is that business relationships are just like any other relationship. They require some effort to maintain and they must be mutually beneficial. As in any relationship, you must be willing to give, share and support, not just take or receive.”
Supplier relationship strategies provide a roadmap to better communication and improved relationships. It begins with a mutual agreement to keep the lines of communication open. To do so, the collective team must collect feedback regularly to make sure that while both parties are “talking” they are also listening.
By utilizing technology that is accessible from the desktop or a mobile device, feedback can literally be gathered at any time in any space. Additionally, technology allows for anonymity, which can encourage honesty and more detail. People tend to speak more candidly when they know their responses can’t be tied back to them, it’s human nature.
Once feedback is gathered, it must be shared with suppliers in real-time. The goal is to anchor suppliers’ opinions of what meaningful work looks like. Thus, suppliers must have real-time insight into the working relationship. Done right, the insights build a basis for developing new strategies that influence a higher level of supplier preference.
The fact of the matter is that only a small percentage of B2B customers receive their suppliers best work.
To learn more about how to achieve supplier preference, listen to this podcast When it makes sense to grow a supplier account today.