Become the Best Customer
Most time and effort is spent in finding the best supplier, but wouldn’t it be time to learn how to become the best customer?
In my life as a manager and consultant I work with customers every day. It is a great experience to provide a solution that a customer hasn’t thought of before and that makes him successful beyond imagination. This success can only be realized by the ambition to be the best supplier for his best customer. The best customer gives me energy! Unfortunately, next to these great experiences I worked with customers for who nothing is good enough, whatever you do. They batter and even abuse their suppliers. In those cases a lot of energy is waist.
Thinking of all these relationships, I ask myself which customers get the most of their supplier ? The sharp ones, the over-organized, the friends or the bullies ?
In every buying relationship both buyers and sellers are looking to find the highest value, it is obvious that a deal will be closed when supply and demand agree on the price and subject of the purchase. IT services providers provide a fundamental means of business. Whether these are traditional datacenter services or the most advanced Paas, Saas, clouds or DevOps, both buyer and supplier are deeply dependent on each other’s success. That is a lot more than just meeting supply and demand.
So, if buyers have an equal responsibility of creating value, what does it take to become the best customer ? The best customer is not necessarily the biggest customer. It is the customer that provides profitable income today and tomorrow and that provides a relationship which is so sharp in innovation that new income with other customers will be generated and it is the customer that you respect and love.
From the perspective of the supplier I see 5 key characteristics that make a good customer:
1. Clarity about requirements
One of the first steps a supplier takes is qualifying the opportunity. Key questions in that process are: ‘Do we understand the customer?’, ‘do we understand what he wants to achieve and what he wants to buy?’ and ‘will we be able to match our capabilities and products ?’ and finally: ‘can we win?’. Even in the delivery phase of a contract when new requests for service arise the supplier will raise these qualifying questions.
For a customer, it is the task to provide all necessary information with relevant details that facilitate the best vendors to come to a positive qualification. Very often requirements change with progressed insights, which is totally acceptable and can even enrich the deal, but the fundamental objectives to do business should not be changed. The best customers do not change their minds of what they want to achieve, facilitate open dialogue on how to achieve it and are very clear about their final requirements.
2. Transparency of process and stakeholders
Many stakeholders are involved in setting expectations, selecting vendors, awarding projects and directing the execution. On the vendor side, developing the right solution and price that provides the most value for both buyer and vendor is a significant investment that is monitored very carefully. Usually this is an extremely stressful process with lots of uncertainties. It is so intense because jobs, bonuses and personal careers are at stake. Can you imagine what happens when a customer changes the process, provides no information or even cancels the procedure ? I have seen board members getting fired or sent to remote places….
On the customer’s side, similar stress occurs in the uncertainty of selecting the right vendor. Although this stress cannot be taken away, good insight in who evaluates the technical solution, operational, financial, quality and managerial aspects of the solution is a relief.
Timing is key ! Losing a proposal is allowed, but it is a deadly sin when an executive cannot predict when the steps of the process are taken. Especially the tightly managed organizations that are publicly owned with strict processes for forecasting revenues and profits, need timeliness. Insight in when a decision is taken with no delays makes a better customer.
One of the causes for delay in system development projects is late or uncommitted decision making from the customer’s side. This often results in the supplier keeping his team stand by, sometimes for weeks or months, resulting in high costs and difficult disputes. The trend of off-shoring made this even worse, the supplier needs to book time with the centers of excellence and gets the internal charges, which cannot be billed.
Challenge the supplier constantly
I have a saying: ‘Your worst customer is your best customer !’
Building and living a sourcing relationship is not easy. Expectations and promises, tangible or not, written in agreements and SLA’s need to be experienced in reality. Per definition this requires discussion. A good customer rewards performance tangibly and is a good reference, but that is the starting point. The best customer challenges you day after day, and requires you to go the extra mile. This is what you want, just like the athlete that is training for the Olympic games.
Once I had a retail customer with who we met all service level agreements, but he kept being unsatisfied ! After many disputes we realized that providing IT services in the retail world, where the shop needs to be open 12 hours per day, and where no errors are accepted at the Point of Sale is special. This gave a totally different perspective on the service levels of 99.9% availability ! Meeting these requirements forced us to build a new organization with new management processes. And these became the basis for new business.
The best customer starts the discussions that lead to new insights for new services or new service delivery, which the supplier can sell more often.
A fair price
The price of the services is the least important of the top 5 characteristics. In the process of getting to an agreement that provides value for both customer and supplier is executed and a fair price is agreed. Fair does not mean cheap, it should allow the supplier to make a profit. I have seen many contracts that did not provide any room for extra effort or in some cases they were so cheap that supplier got bankrupt!
But on the other hand a price that is far higher with the value delivered is an enormous basis for disputes. An example is the case where in contract renewal the new price was a fraction of the original price the customer had paid over the last four years ! It took a lot of effort to convince the customer that totally new cost structures made very low prices possible.
The best customer assesses the price from the perspective of all cost components, compares it with the market and reassures it with all levels of management of the supplier.
By the insight in these five characteristics I believe we can jointly create the customers we love, where more suppliers and customers are made for each other and with whom it is fun to do business!Back to the overview