2014 Global SRM Research Report - Customer of choice

ARTICLE

STATE OF FLUX

2014 GLOBAL SRM RESEARCH REPORT

CALL ME OLD FASHIONED…

Call me old fashioned but isn’t this in its most basic form about common courtesy and respect? It is a two-way street and if we want good behaviour from our suppliers then we need to take a serious look at how we behave, both at an individual and corporate level. Our SRMmodel includes a pillar called ‘relationship development and culture’. Here we look at how organisations are developing the attributes of a successful relationship. Among these are openness and transparency; innovation; alignment; trust; collaboration; and emotional intelligence. None of these attributes can be developed in isolation. They all require both parties to feel they have a vested interest in a relationship that is based on mutual respect. Most organisations rightly put a large amount of effort into ensuring their customers get the best possible experience. Why? It’s mostly about building loyalty, and getting them to buy, buy more often, buy in higher quantities and keep coming back. In this age of increased supplier dependency, where resources are becoming scarcer and access to innovation is a key differentiator, building supplier loyalty and the supplier experience should also be a consideration.

I don’t think we have to re-write the rule book here. But, we should revisit some basics: ö ö How is the supplier treated when they enter your premises? ö ö Do you return their calls or emails? ö ö Do you listen to their ideas, challenges or news? ö ö Do you always respect confidentiality and IPR? ö ö Do you run a ‘Voice of the Supplier’ study? ö ö Do you run a formal 360° feedback regularly? ö ö Do you understand their goals and targets both at a corporate and an individual level? ö ö Have you built rapport with your key contacts? ö ö Have you put in place any two-way performance metrics? ö ö Do you treat them with respect and common courtesy? ö ö Have you done an annual joint supplier account plan?

USING 360º FEEDBACK, A RELATIONSHIP CHARTER AND ACCOUNT PLANNING TO ENSURE ALIGNMENT

Key to becoming a customer of choice is fostering an environment of trust between your organisation and your supplier. We have found three activities are useful building blocks to do this: 1) Measuring and monitoring both parties' perceptions of the relationship using a *360º relationship assessment. 2) Developing a ‘relationship charter’ to ensure both parties agree what behaviours are acceptable and how you would like to work together. 3) Conducting joint account planning on an annual basis. From our 2014 SRM research results, we have seen that less than 30% of organisations use a 360º feedback diagnostic to regularly measure the joint perception of the relationship.

Example 360o feedback output

COMMITMENT

CONTINUOUS IMPROVEMENT

PREDICTABILITY

MUTUALITY

FINANCIAL MANAGEMENT

TRANSPARENCY

ORGANISATION

PERFORMANCE MANAGEMENT

COMPATIBILITY

CAPABILITY

* 360° relationship assessments measure the perception of individual relationships by engaging stakeholders from both organisations. They should not to be confused with a voice of the supplier, which gathers feedback from a range of suppli- ers to understand what’s important to them and how your organisation ranks versus your competitors.