So you’ve been seeing this Customer for almost a year and feel you want to take the relationship to the next level? What do they say?
They’re saying all the right things but don’t back it up with actions? Customers sometimes speak with forked tongues!
There are essentially three relationships levels possible between supplier and customer. Two are quite easy to understand but the third is more complicated.
At the lowest level of supply you probably have little or no relationship with a customer. The relationship is purely Transactional. If your prices and terms are good, you’ll get the business. Next time you might not be so lucky. What you supply isn’t mission critical to the customer to they buy at lowest possible price.
The step above this is ‘keeping the business running’ or Operational. Here, what you sell is important as it keeps the customer running. Utilities as a good example. Who knows who supplies the electricity ? Do we care as along as the lights come on when we hit the switch?
The relationship has to be stronger in this area. There will be contracts and regular discussions about prices and conditions but probably NOT about strategy.
This takes us to the highest level of relationship: Strategic Partnership.
It’s one thing to talk about such a relationship but it needs to be backed up by actions. How many buyers have we sat in front and heard “we’re looking for a strategic partner, someone we can build a future with. Now lets talk about a price decrease!”
In other words, the actions don’t support the words.
Strategic Relationships are few and far between. Companies cannot support a large number of such relationships as they take a lot of time to manage properly. They will be lead by top management as they are mission critical. Words to listen out for:
“How can we both make profit from this?”
“Your people need to know my people.”
“We should consider profit sharing on this project.”
“Fancy some lunch?”
There is a merging of resources on key projects that almost resembles a JV relationship. Time is taken to socialise.
To accept the offer of such a relationship is a big decision because you’ll have to play your part and this might distract you from other customers. Do the gains outweigh the potential losses? Only you can know.
Look and listen. Actions and words have to match or you’re probably still at the Operational relationship level. Take your time. Divorces can be messy!