2014 Global SRM Research Report - Customer of choice

STATE OF FLUX

2014 GLOBAL SRM RESEARCH REPORT

ARTICLE 63

Before setting out on any journey, it’s wise to have an understanding of where you want to go and what you will find when you get there. The journey to customer of choice is no different.

ARTICLE BY

Mel Shutes, Executive Consultant and Head of SRM at State of Flux. Call Mel on +44 (0)2078 420 600 or email him at mel.shutes@stateofflux.co.uk for more information on becoming a customer of choice.

The destination is a place where the company is well positioned to deliver savings from a collaborative approach to cost reduction, and receives the benefits of preferential treatment from its most important suppliers to achieve greater competitive advantage. In this article, we will explore where the journey to customer of choice starts and ends. We will also examine some of the twists and turns in the road, and how to stay there once you have arrived. The journey to customer of choice will have different starting points. For some it will start with a company culture where suppliers are well regarded and viewed as a vital extension of the enterprise. For others the journey starts from a culture where suppliers are seen as a necessary evil, treated as a risk to be managed.

Relationships may be adversarial and most interactions will have win / lose outcomes. In such companies, the old adage ‘the customer is always right’ is taken literally. This may encourage behaviours that fail to recognise the needs, and rights of the other party. Some companies stubbornly refuse to accept there are any benefits to be gained from changing these one-sided processes and behaviours. However, our research into the SRMpractices of even the most prestigious brands, reveals an understanding of the need to be a customer of choice. So perhaps a good place to start the journey to customer of choice is by understanding why you should make the journey and what you might find when you get there.