STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
ARTICLE 67
HOW TO BECOME CUSTOMER OF CHOICE
The time and effort it will take depends on where you are starting from. No matter where you are, you need a plan. The plan needs to identify where you want get to, how you will get there and how you will overcome the challenges on the way. This will define the strategy and changes required to processes and behaviours.
If you are engaged in a programme to develop improved SRM then becoming a customer of choice for those suppliers identified as critical needs to be an integral part of that strategy. This is a good place to start, but ultimately your customer of choice strategy should extend to your wider supplier population, including at the very least your second tier of segmented suppliers.
THE STARTING POINT – A CUSTOMER OF CHOICE DIAGNOSTIC
VOICE OF THE SUPPLIER
How do you know if you are the customer of choice for any given supplier? There are lots of questions you can ask, which will give you an anecdotal or an individual supplier’s view. For example, how did that negotiation run? Was it long and protracted? How is the relationship working? All of these are good questions and will give you an indication of whether you are viewed as a customer of choice. But in order to develop a strategy and a plan, you will need more qualitative data to initiate and direct the process and behavioural change necessary. The starting point is building an understanding of what suppliers are looking for in their customer of choice. During the course of our research, we asked sell side companies this question. The number one attribute they are looking for is trust, closely followed by openness and a willingness to share information; clear and concise (two-way) communication; and collaboration. This might serve to allay fears that being a customer of choice means reengineering the business. However, depending on where you are starting from culturally, the change necessary to develop these desired attributes may be more difficult. While these are good indicators, it’s what suppliers specifically think about you and how you compare with your competitors that is important. This information can be gathered in two ways:
Approaching multiple suppliers to gather data from a standard question set about how you are perceived as a customer. This approach has the added advantage (if facilitated by a third party) of allowing supplier responses to remain anonymous. It also enables more open feedback and the chance to gather competitor comparisons. Less than 50% of companies have gathered feedback from suppliers on how they are perceived as a customer in the last 12 months. State of Flux 2014 global SRM research
360° RELATIONSHIP ASSESSMENT
A supplier-specific approach that engages multiple stakeholders from both parties to assess key relationship attributes, including many that relate to customer of choice. Only around one in three companies are using a 360° relationship assessment tool to understand specific supplier relationships. State of Flux 2014 global SRM research
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