Have You Hugged Your Supplier Today?By Michael Hess | September 23, 2011
Good companies demonstrate that they love customers.
Really good companies show that they love their employees just as much.
Stellar companies include suppliers in their circle of love.
Most companies don’t think of suppliers the same way they think of customers and employees — and even if they say they do, they rarely treat them that way. They treat suppliers as if they are lucky just to be graced with a purchase order. That’s very short-sighted and self-defeating.
Smart companies recognize that key suppliers are partners, very much in the same circle of importance as the other stakeholders. Thinking this way, and acting accordingly — being open, accessible and responsive, paying on time, letting suppliers make a fair living, and treating them as contributors to your success — can give you a major competitive edge.
Suppliers are like employees: You can push them to bend to your wants, or you can make them want to push for you; you can offer the potential to be fairly rewarded, or you can limit their opportunities; you can trust them and let them breathe, or suffocate them with rules, regulations and warnings; and like employees, the way you treat suppliers will determine whether they simply “show up for work” or give you their all.
Here are just some of the ways healthy supplier relationships can give you an advantage over companies that treat them like serfs:
- Pricing and terms: Suppliers who feel like secure, valued partners are much more likely to help with pricing and terms when and if they can, even if you’re not a huge customer. I never push my suppliers around or make excessive demands, and many of them come to us with ways to save us money, without ever being asked. You can bet they don’t do the same for customers who beat them up.
- Delivery: Supplier-friendly companies will usually get preferential treatment when it comes to expedited lead times or access to limited-availability items.
- Favors: There will inevitably come a time when you need a special favor or two (”hey, any chance you can give me an extra couple of days on this one invoice?”). Suppliers will bend over backwards for customers who treat them well, while unloving customers get the “yeah, jeez, sorry, I really wish I could help” answer.
My company supplies branded consumer products to retailers, big and small. We cherish our customers and treat them all well. We live by a strict set of values. But we will always go the extra mile for the customers who love us back, irrespective of how much they buy. And we won’t do business with companies that think the supplier/customer relationship is a one-way street.
Case in point: A famous national retailer recently asked to sell our products; of course we were thrilled. Then they sent us their vendor guide, which was primarily a list of all of the ways we could be penalized, from putting a label on a box incorrectly, to not following precise documentation requirements, and much more. Everything was written in a one-sided, non-negotiable, overbearing way. I got such a bad vibe that I walked away. As a small business in a hypercompetitive industry, walking away is no small thing. But relationships are everything to me, and I did not see this one as having a promising future. I have no regrets.
Don’t get me wrong — standards and expectations are important, whether with employees or suppliers. You should set a high bar and be demanding. But if you want people to respond positively and give you their best, you must do so in a way that reflects a true desire for mutual benefit. I wasn’t worried about meeting any of this retailer’s requirements — we are good at what we do. I was worried that they couldn’t care less about my company.
On the flip side, here is what some of the biggest and best companies say, publicly and proudly on their websites, about their supplier philosophies:
(Disclosure: we are, in fact, a supplier to Zappos. A very happy supplier.)
“…deal fairly with your fellow employees, our customers, vendors and investors… take great pride in the many wonderful things that Zappos stands for, and as long as everyone remains committed to the values that make us special, Zappos will never be just another company.”
The Container Store
“From small ‘mom and pop’ operations to worldwide product manufacturers and service providers, we’ve always worked with our vendors to create strong, mutually beneficial partnerships.”
“Our supplier partners are our allies in serving the interests of our other stakeholders in bringing to market the safest highest quality products available. We treat them with respect, fairness and integrity at all times.”
What’s your company’s approach? Do you throw your weight around and believe your suppliers are there to make money by serving you, or do you take the “holistic” approach and believe that a little love will go a long way? Please share your thoughts and experiences.
Oh, and by the way, chances are you’re a supplier to someone too. Circle of life.
Flickr photo courtesy of Julie McLeod, CC 2.0