Loyalty Alliance Style

You want loyalty from your customers, employees, and suppliers. Every imaginable supplier, B2B and B2C, is desperately looking for customer loyalty too. But what about those that want the last ounce of advantage on both the sell side and also the buy side? Do you know who I talking about?

See It with Your Own Eyes

I’ll never forget an experience I had while visiting an ice manufacturing plant in Southern California. I was visiting the plant in preparation for a multi-day marketing workshop I was to conduct at that industry’s annual convention. I wanted to get a feel for the industry first hand.

I set up an appointment to visit the plant but the owner was out. So, his second in command gave me a factory tour. Over the course of the tour, and to my amazement, my guide was bemoaning what he considered poor loyalty from their customers—stating that many would buy from another company if his drivers were late with deliveries. I listened intently and empathetically to him. Toward the end of the tour he was showing me the ice bagging machinery so I asked my guide about his company’s bag supplier. Holy cow! This guy’s facial expression turned sheepish. He then told me, “We like to play one supplier against another for the best possible price.” Excuse me!

What’s In Your DNA?

Apparently supplier loyalty was not in the DNA of this particular ice manufacturer. However, they expected loyalty from their customers. Is it just me? Or, can you see the cosmic humor in this situation? This organization wanted it both ways. It’s kind of like the folks that regularly shop at Wal-Mart and then complain that all the American jobs are being sent overseas. Duh!

Looking at a 180 degree difference in business philosophy is Universal Electrical Contractors in Flint, Michigan. President, Gene Dennis, successfully shifted his buying from several electrical distributors to giving Graybar an exclusive agreement. A decade later the alliance is still going strong and highly profitable for both.

What’s a Business Leader to Do?

1. If you want loyalty from your customers, practice the concept of loyalty in your dealings with suppliers.

2. If you discover that adversary relationships are in your organizational DNA, put new policies into place to mitigate the situation.

3. If you want collaborative DNA at the core of your organization, review how your key people are being compensated.

4. Reward the behavior you want repeated—meaning, do not reward the procurement department only for squeezing an additional dime out of your suppliers. Rather, build strategic sourcing relationships.

Now the Getting Gets Good

After you do a major overhaul in the area of supplier alliance development, you can use your newly found strategic sourcing understanding to develop better relationships with your customers. This is also a great time to review your employee partnering policies. Trust me on this; you do want your employees to have an emotional ownership in the success of your business. In difficult economic times—sure, everyone is looking for a deal. But, when you and I have a vested interest in our relationship, we’ll bend over backwards to help one another. That is the basis for real customer, and seller, loyalty. It’s never too late to start building the new era of loyal relationships.