65
Figure 2.11. What proportion of your key suppliers currently regard you as a customer of choice?
What does our SRM research reveal?
24%
21%
19% 19%
14%
From our 2013 research, we can see that 32% of our respondents believe themselves to be a customer of choice for less than half of their key suppliers. Another 24% don’t know. This leaves a situation where only 44% of respondents believe they are a customer of choice for more than half of their key suppliers. The word to consider carefully here is ‘key’. By definition this suggests that some form of segmentation has taken place and the suppliers being considered are probably high spend / high criticality. The risk this represents when things go wrong and suppliers need to make choices about how they support, is clear. STATE OF FLUX GLOBAL SRM RESEARCH REPORT 2012 – EXECUTIVE SUMMARY “Feedback from respondents indicates that good SRM practice will be rewarded by customer of choice benefits. In order to become a customer of choice, it is important to understand what your supplier values from a relationship aside from the obvious financial measures of revenue and profit. This year’s research clearly identifies what it is that supplier organisations value: alignment; trust; brand association; communication; and being respected and valued.” STATE OF FLUX GLOBAL SRM RESEARCH REPORT 2011 – EXECUTIVE SUMMARY “The leaders are also more likely to report benefits through having customer of choice status with key suppliers. Senior management support, preferential pricing and continuous improvement ideas are the top 3 benefits. However, in the past 12 months less than half of organisations say they have achieved these. Fewer still cite access to the best people, scarce materials or capacity, or first refusal on innovations – suggesting significant value improvement opportunities in the future.” Voice of the supplier research is an opportu- nity to understand what your suppliers really think about you, and how this compares to other companies and best in class. It will provide an essential insight to your status as a customer of choice, and the associated risks and opportunities.
3%
0%
ALL
NONE 125% 2650% 5175% 7699%
DON'T KNOW
% OF SUPPLIERS
Figure 2.12. Typical voice of the supplier summary output
■ COMPETITOR 1 ■ COMPETITOR 2 ■ COMPETITOR 3 ■ COMPETITOR 4 ■ CUSTOMER
GROWTH & INNOVATION 4.0 3.8 3.6 3.4 3.2 3.0 2.8 2.6 2.4
GENERAL RELATIONSHIP
TENDERING & NEGOTIATION
PAYMENT
ORDERING PROCESS & FORECASTING
Voice of the supplier research should not be confused with a 360 degree relationship assessment or vice versa. Voice of the supplier research provides a high level view of multiple supplier perceptions across a range of business and relationship attrib- utes. On the other hand, a 360 degree relationship assessment is a detailed diagnostic of an individual relationship, involving input from a range of key stakeholders in both organisations. Article by Mel Shutes, Head of SRM at State of Flux. Call him on +44 (0)207 842 0600 or email him at mel.shutes@stateofflux.co.uk for more information on how voice of the supplier research can help you understand what your suppliers really think.
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