2024 Global SRM Research - Return on Relationships

2024 GLOBAL SRM RESEARCH REPORT

MAKING CONNECTIONS, NOT A QUICK BUCK

Benefits of strong customer or supplier relations

Ted on: Brand vs reputation Rubin says while brand and reputation share similarities, they are not the same thing. “Your brand is the sum of what your business does, what you stand for, and how you approach your work. You have a degree of control over this. Your reputation, on the other hand, is what people remember and share about your business. It’s the culmination of their experiences with you, and it’s something that you have less control over. “Your brand is a promise, and your reputation depends on whether you keep it. Building and keeping trust is the key… and it takes work and dedication.” “Trust leads to loyalty and trust and loyalty will always lead to return on investment.” He says word-of-mouth recommendations are a powerful marketing tool - be it for customers or suppliers. For customers it is about quality products and exceptional service; for suppliers it’s about ease of doing business, trust and transparency.

Good sales professionals will be employing all these tactics, and it’s as well for procurement to be aware of them and potentially apply the same approach to their own networking with suppliers. It demonstrates a level of focus and engagement - and Rubin’s father gave him the same advice ahead of his first date. “He said: ‘Make sure you look at her Ted, concentrate on her or you’ll never get a second date’. Whether you’re connecting in a room or by email, always try to find ways to personalise it; when people tell you things, really listen and hear what they’re saying.” Nowadays procurement may find itself ‘selling’ its organisation to a supplier as much as a supplier is selling a product or service. It is vital to demonstrate trust, respect, and engagement. wIt is only by listening and forming these relationships that procurement will gain supplier expertise, market intelligence and possibly access to the next big thing. “Ultimately the aim is to have suppliers wanting to work for you,” says State of Flux Founder and Chairman Alan Day, “that way you get what the leaders in the field of supplier management achieve: Earlier access to innovation, preferential pricing and the supplier’s ‘A team’.” Rubin shares a final tip: Be sure to use their name in conversations and correspondence. “As Dale Carnegie, author of How to win friends and influence people, said, ‘A person’s name is to that person, the sweetest, most important sound in any language’, so make sure you use it.”

For business-to-consumer companies exceptional service will set you apart, says Rubin. He outlines some of the benefits to be gained from this approach and we draw comparisons from the B2B world - particularly in becoming a supplier’s customer of choice. Customer satisfaction: Exceptional service leads to higher customer satisfaction and satisfied customers/ suppliers are more likely to become advocates for your business. Brand loyalty: Exceptional service can help to build a greater sense of loyalty, which can, and will, result in long-term relationships. The same can be said for creating strong and successful supplier partnerships. Competitive advantage: In competitive markets, exceptional service is a key differentiator. Similarly, as companies compete for scarce resources, how you behave towards key suppliers can mean the difference between achieving or failing to access that product or service. Customer retention: Acquiring new customers is more costly than retaining existing ones. Exceptional service boosts satisfaction, reducing churn, and increasing their lifetime value. Finding and onboarding new partners is a time-consuming business. Where you have partners you want to retain, work to keep them by being fair, transparent and efficient. Employee morale: Empowered employees are more likely to deliver exceptional service and achieve higher job satisfaction. Happy staff are more likely to stay and contribute positively. It’s important that suppliers receive consistent messages from whomever they contact within a business. Internal colleagues too are more likely to convey those messages clearly and positively if they understand them.

Community culture: Companies should reach beyond creating networks to establishing communities. A network gives you reach; but a community gives you power. Businesses can play an important role linking and connecting supplier firms to build a stronger ecosystem for their providers and themselves. Problem resolution: Providing exceptional service can turn a negative experience into a positive one. Prompt and effective problem resolution can leave customers feeling valued and appreciated. Done well, how you behave when tackling an issue about or for a supplier can lead

complaints or share ideas, you may miss opportunities to make improvements that could help you both, or break into new markets. Customer-centric culture: Building a customer-centric culture within your organisation reinforces the importance of putting customers first. This mindset permeates through all levels of the company and influences decision- making. Business-to-business organisations can generate this same culture by ensuring all departments focus on how and where their company makes money. Increased profitability: Satisfied customers are more likely to spend more and make additional purchases. Exceptional service contributes to increased customer spending, leading to higher profitability. Honest, open buyer/ supplier partnerships can generate more value for both sides. The better they work together the more opportunities they will be able to grasp and the more problems they will be able to overcome.