Customer Relationship with Supplier

For a positive growth of business all customers have to depend, directly or indirectly, on good and reliable suppliers.

Apart from their expectations from the supplier the customers also need to be loyal to them so as to strengthen their relationship. Therefore customers should work on building a strong and long-lasting supplier relationship as they do with their own customers. And it is not a complicated process.

The positive customer-supplier relationship begins with the initiative of the supplier to demonstrate his sensitivity to the customer’s needs.

A customer always vouches for the conditions of his business deal with the supplier and likes to be honest with them to have a smooth flow of business. But many non-serious suppliers sabotage the deal in the beginning only by making the customer struggle to even getting a relationship started.

The lapses and diversions on the part of the suppliers can affect their relationship in many ways as given below:

• Satisfaction: The customer expects overall attention and convenience in all departments to ensure smooth fulfillment of his needs. This includes quality, timeliness, ease of access and commitment of conditions. He wants to believe that the supplier cares for him.

• Competitiveness: Customers assess the supplier through competition based on the pricing and quality of their products, its reliability, its technological background and industry trends. These factors affect the deal.

• Innovation: It is difficult for the supplier to divert the customer from their quality assessment. Customer knows and lives the products more than the supplier does, as he is working on them and is in a position to suggest innovation and development for the products.

• Finance: Suppliers have to be ready for providing financial advantages as loan, extended terms on purchases and postponement of debt when demanded by their loyal customers particularly at their growth stage or when they are into a financial crisis.

On the other hand suppliers also have a right to get their needs met as they are ultimately motivated by profit. They want to be known as the best in their deals so they count on customer loyalty and satisfaction at all levels which translate into direct benefit of both of them. Therefore it is only win-win relationships between them in all stages of the customer-supplier chain to produce total satisfaction. It should be remembered that a customer assumes his name only in relation to his supplier. As such in order to be a valued customer to suppliers, here are a few things he should do:

1. Payments always on time. The customer should always negotiate for favorable payment terms before the deal is initiated. But once the order is placed, the commitment should be honored.

   Any problems arising in this regard should be properly dealt with to maintain the goodwill and benefits to earn.

2. Provide adequate flexibility. The customer should try to give suppliers as much flexibility as possible for them unless there is a compelling, competitive reason not to do it.

   Unreasonable demands should be avoided. This tendency also connects to quality production.

3. Personalize the relationship. The customer should always be in contact with the supplier and visit him frequently, not necessarily only when it is needed. He may also be invited to attend and give suggestions in some of their strategy meetings.

   Methods of improving business may also be discussed. Sharing of knowledge, opportunities, service benefits, software compatibility etc. would be beneficial for both.

4. Share information. The customer should be communicative by keeping the suppliers aware of what is going on in their organization. He may share some of the key strategic information with them.

   Frequent and open communications are important in understanding each other’s expectations. All relationships begin with self.

5. Be a demanding but a valued customer. Being a demanding customer can just be fair. The customer should state his demands clearly and tell his supplier to hold his agreements. At the same time as a valued customer he must always cooperate with him to keep up his commitments without embarrassment.

   Sharing knowledge, service benefits, media exposure opportunities, software compatibility, efficiencies etc. would add to enhance relationship.

These essential factors are important for the customers to create and maintain a healthy relationship with the suppliers.

Authorship/Referencing - About the Author(s)

The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.