Written by Sean McPheat |
We were working with a client recently who asked us if we could discuss strategies on how to become a preferred supplier to their customers.
I must admit to feeling a bit puzzled. My consultant asked them, “Why do you want to only become a preferred supplier?”
The answer was along the lines of ‘isn’t that what very supplier should want to attain….preferred status?”
My consultant said, “Actually there are five different levels of relationship you can have with a customer. Preferred supplier is only level 2!”
This surprised our client and they asked for an explanation.
My consultant went on to tell them the five levels.
Level One is known as Vendor.
This is when we offer transactions and the offer is mainly for items that are wanted occasionally, where price and availability drive the overall buying criteria.
Level Two is the Preferred Supplier.
This is what our client was trying to get to.
It’s the position many suppliers want to get to, where the customer uses them for the specific products and services they supply, and will only go elsewhere if there’s a problem with supply.
However there are three more levels we can work to attain.
Level Three is called Solutions Consultant.
This is where the supplier acts as a consultative resource to the customer, adding valuable insights and knowledge to the client’s delivery base.
It allows the supplier to build a deeper relationship with the client.
Level Four is known as Strategic Contributor.
Here, the supplier is seen as assisting the client in major ways, like helping out with strategic planning, analysing their future market opportunities and identifying what future industry changes would affect their client’s operations.
The highest Level, Five, is known as Trusted Partner.
The partnership involves letting the supplier in on key decisions being made by the company.
We have often seen suppliers set their businesses up based on the needs and wants of specific clients.
Clients tell their trusted partners how they want their products and services offered and are integral to the suppliers future operations.
This partnership shows up in the decisions that are made for future investment.
What happens as you go through these levels is the ability to collaborate with your customer’s business in such a way that you operate through situational fluency.
This means you have a working knowledge of the client’s business and are able to become flexible in your assessment of their needs in skill-sets, attitude, values, rules and insights.
Our client was intrigued by all this and has employed my consultant to offer more advice on how they can climb higher up in the relationship hierarchy.
They are no longer content to just be preferred suppliers, and want to build a better, log-term relationship with their clients.
What you need to do is work on creating closer ties with your own clients and aim to become that trusted partner.
Only then will you be a bit more secure in achieving continuous business.
Originally published: 20 October, 2016