The relationship between customers and
suppliers has existed for thousands of years. Just like everything else, this
relationship grows over time or diminishes. We need to turn it into something
much more substantial that transcends the usual transactional nature of this
relationship. Let’s talk about this new paradigm in the customer-supplier
relationship.
In the beginning, there was the provider
The basic form of the customer-supplier
relationship was transactional. The customer had a need, and the provider or a
vendor provided for that need. Once the transaction was completed the vendor got
the money, and the customer got the product or service that they bought.
Today, the customer is not looking to just purchase something. They want more value for their money. Hence, suppliers who want to be more successful need to understand their client’s needs at a much deeper level. It is crucial for both parties to become resilient in business.
The vendor becomes the expert
The next stage of evolution transforms a
provider or a vendor into an expert. This change happens when we have a market
with hundreds, or thousands of vendors and the customer needs to decide which
one to choose. These providers offer the same products or services for the same
price point, so there needs to be something more that will help the customer
decide how to make the right decision.
Vendors realize this and understand that they need to become subject matter experts to stay at the top of the market. Today, we call them SMEs. Once a vendor specializes in that particular service or a product, they become the expert. They have vast knowledge in a specific area that gives them the edge. That something extra creates a strong relationship with customers based on trust and accelerates business growth for both parties.
Today’s businesses leverage a supply chain
A supply chain is a system that includes the
customer, different vendors and partners, all aimed at providing a finished
product or service to the customer. It is a panel of experts from various areas
that build
a high-performing team.
Organizations leverage a group of SMEs to create an effective chain of just-in-time providers. This enables a higher ROI for the buyer and helps the supplier to develop economies of scale in their area of expertise.
Each player in the supply chain will flourish by forging a strong partnership with other entities in this chain. A collaborative partnership is a next level in the evolution of a customer-supplier relationship.
How to acquire and retain customers?
To acquire customers, a supplier needs to offer
an excellent product or a service and deliver it in the best possible way. To retain
clients, the supplier needs to offer a sustained value. This will compel
the same client to come to the supplier again for more goods or services. This brings
us to the final stage of the evolution of this relationship.
Evolving to a trusted advisor relationship
Let’s review a few options for a vendor in a
prospective client situation:
·
let the customer do all the research
and choose what they think is the best
·
make a quick sale by selling the
cheapest version of the product or service
·
make a huge profit by selling the most
expensive product or service
While all of these are valid options, in order for a long-term and mutually beneficial relationship the supplier needs to consultatively understand the prospect’s requirements and then educate them on the best choices. That’s when the customer starts perceiving the supplier as an advisor. By relying on the supplier to guide on the best product configuration or service package, the customer leverages this partnership for competitive advantage.
Understanding this new paradigm in the customer-supplier relationship will help both parties to flourish. A supplier must strive to become a valued consultant to their clients, not just someone who provides a commodity. The customer needs an advisor that will guide them past the transaction and into the future. This is the highest level of relationship a business leader can hope to achieve today as a buyer or a seller.
