Procurement Leaders! What type of a buyer are you personally and professionally? What about your team?
Today’s post is assembled by Ron Southard, CEO at SafeSourcing based on data from our white papers and past blogs at SafeSourcing Inc.
Janet loves the people at the places she shops. They are like a second family to her and she thinks of them as part of her social circle. When Janet shops she does not just buy, she builds relationships with the store owners and workers. Janet is not rich, by any means, but the relationships she has built over the years are very important to her and even when new less expensive competitors come into town she refuses to leave her favorite stores and shops. Loyalty is important to her even if the shop owners sometimes take advantage of her.
The Extra Mile – When companies take Janet’s approach, they often experience great customer service from their suppliers. This can be expected for a few reasons. First, many companies appreciate loyalty from their customers and try to reward in kind where they can, especially when the customer gets into a crisis. Secondly, they know that they can count on the customer’s business and want to ensure they do not lose that business to one of the aforementioned “less expensive competitors.” Their reminder to their customers frequently is “We may not be the cheapest, but we’re the best!”
Taking Advantage – The downside to being a loyal customer like Janet is that some businesses can take advantage of that relationship and loyalty. They understand that the customer likes their company and does not want to go elsewhere and that they appreciate the little extras the supplier provides. Because of this, many suppliers in this position do not mind passing on little increases in price every year even though their costs may not be increasing along with them. The customer may notice the increases, but usually not enough to outweigh their loyalty to the company and they will often justify the increases by thinking of the extras the suppliers gives them, even when those extras do not come close to equaling the increases being passed along.
Beyond Your Own Backyard – Blind loyalty can be a dangerous thing especially when, as mentioned above, suppliers begin to take advantage of the loyalty. It can also be detrimental to a company because of the missed opportunities for better service at even better prices. Because Janet never even looks at stores outside of her favorites, she will never know what other companies could offer her. The sad truth is that so many organizations operate the same way. They will not leave what they know, so they will never know what they could have had.
Traditionalists operate under the best of intentions. Unlike the Misers, they are not interested in savings nearly as much as they are in solidifying their relationships with vendors. They usually will get great customer service but are in frequent danger of being taken advantage of by those same vendors over time.
Please check back tomorrow for Part VII “The Cash Rich (Fat, Dumb and Happy” In order to learn more about SafeSourcing, please contact a SafeSourcing Customer Services Associate and ask about our risk free trial program.
