Supplier Relationship Management: Make it a Win-Win-Win


Here are two powerful questions that every business owner, or business manager, should keep asking:

1. Why do our customers buy from us?

2. Why do we buy from our suppliers?

Every business can answer those questions, but really successful businesses answer them in ways that continually drive the business forward. You are your customers' supplier, and you continually work to deliver what your customers want. In a nutshell, they want two things:

1. Value for money

2. A relationship that means more to them than just commodity-price-delivery.

Value for money is not the same as price paid, therefore lower cost and less value does not build the long-term relationship. High perceived value is the starting point. That's followed by customers knowing they are valued as customers and feeling they are part of something more than a simple "product received-money paid out" transaction.

The same goes for your relationship with your suppliers. You want and need your suppliers to deliver value for money to you. You also want them to be part of a relationship that helps you to build your own relationship with your own customers. You need your suppliers to know the reasons your business exists. They have to know how your business delivers on your promise to your customers. They have to want to perform in such a way that they support your business purpose. When they do that, they do more than deliver well-priced and timely products to your warehouse. They become part of delivering your promise to your customers. Here is a third question:

3. How do you achieve that?

The process is logical, and not just logistical. Follow these steps, and your supplier relationship will strengthen. As that happens, your own customer relationships will strengthen.

  • Be very clear about why your business exists - what is your "Why"?
  • List out the reasons your committed customers (not your passing trade) choose to buy from you, and why they stay loyal.
  • Link the practical details of your "Why?" and your customers' "Because". That means check off the features, advantages and benefits your products and your service deliver to your customers.
  • Decide if you can improve on any stage in the process, or if you are doing everything as well as possible.
  • Now decide how your suppliers can support you by either continuing to do what they do or by improving something they do.
  • Focus on any kind of "pain-point" where you believe your suppliers can improve.
  • Arrange a formal meeting with each supplier, and tell them everything you included in these six points above.
  • Ask them to link their "Why?" with your "Because" so everyone can work on improving how they help you to be the best you can be - for your customers and for your shareholders.

The result is that, together, you build a stronger and lasting supplier relationship. The net result is that your customers win, you win and your suppliers win: Win-Win-Win.

Rachel Watson

Written by Rachel Watson