Substantiating the Financial Value of a Strategic Supplier!
Today’s economic focus has everyone counting loose change – right or wrong? This places a significant challenge to “best-in-class” strategic suppliers whose pricing is very often at the top-end of their supplier category. Strategic Suppliers know they bring value and financially impact their customers in a positive way. Unfortunately, many customers fail to either recognize and/or appreciate this positive impact.
Shame on the customer? NO– shame on the Strategic supplier.
It is more critical than ever in today’s economic business climate to ensure that any Strategic Supplier fulfills the following business best practices:
- Adopt a ROI methodology that will document, validate and gain their customer’s agreement on the positive financial impact of the strategic Supplier.
- Collaborate with top customers on developing a mutually agreeable joint score-card.
- Re-engineer the sales organization to be “best-in-class” business resources; resources that can help customers be more successful.
The real challenge remains that this type collaborative, cooperative “buy-sell” relationship is not well understood by either party. It may in fact bring with it a degree of skepticism. Strategic Suppliers are often thought of by customers as suppliers who receive a substantial quantity of a customer’s business and in turn offer lowest pricing. Strategic customers are often thought of by Strategic Suppliers as a customer who spends significant dollars with a supplier. In both of these scenarios the relationship basis is too shallow to facilitate long-term financial success for both the customer and Strategic Supplier.
My observation is that the Strategic Supplier needs to take the lead and bring the practices to the table that will benefit all parties. Not all customers will be receptive to this approach; however, do not give up on it too quickly. The Strategic Supplier may have to not only prove, but reinforce their real purpose over time; the sole purpose of enabling mutual success through joint and transparent collaboration and cooperation.
Keep in mind three key words; sincerity, authenticity and integrity – these words may set the table for this collaborative/cooperative approach!
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