Not surprisingly, when we asked purchasing executives what happened when suppliers delighted them, we heard stories about suppliers who were selfless, responsive, conscientious, and value adding—essentially the opposite of the behaviors that disappointed buyers. Delighting buyers is not difficult if you are committed to serving them exceptionally well, but it does require a commitment to behaving in ways that are well above the norm. Here are some of the stories we heard:
They provided a solution beyond what they offered to help me take advantage of opportunities in my business. They helped me improve communications, quality, or product flow essentially at no cost. Those are the kinds of things that make my job more efficient and drive cost out of my business.
I had a gear manufacturer, and I called and said we’d lost a bunch of gears, and this manufacturer ran their systems over the weekend and changed their manufacturing process in order to meet my needs. That was an extraordinary example of customer service. I haven’t forgotten it, and this was twenty years ago.
Actually, we’ve had a supplier who lost business in order to help us. They showed us ways to use less of the product, and they recommended that we use someone else because their product wasn’t really what we needed. Then they found the right supplier for us. They were looking out for our best interests—and, in the long run, theirs, too.
We had a supplier several hours away, and we were really having issues on inventory and scheduling between the two plants, and we sat down and worked at the floor level, traded people, exchanged people, and saved a lot of money and split that evenly with the supplier. They were easy to do business with, even on the toughest issues. They would do whatever it took and change their process to make us both better.
After we award business to a supplier, the start-up portion is so important, and when they plan for execution and overkill it, that is delightful. In start-ups there are always issues, and when they plan for failures and have people there to handle the exceptions and resolve the problems, we are delighted. That goes a long way toward earning our trust. Often, our biggest headaches are start-ups. When they put all hands on deck, even when it’s not justified, and have more trucks there than they need, that is fantastic and we can use them as examples in other markets.
We have one supplier partner in Houston who offered something fantastic. There are different technologies for achieving better fuel economies and engineering how you unload a trailer. This supplier offered to sit in a meeting with our other equipment suppliers and share engineering ideas so they could reach a consensus on how best to engineer the trailers to improve the equipment and build a world-class waste management trailer. They were willing to share their knowledge and work with their competitor suppliers to help us build the finest equipment. It showed how strongly they felt about our partnership. That will help them ensure long-term business with us.
They were always one step ahead of me. They proactively came in with insight into what was happening or what was going to happen in the marketplace. They had a well-thought-out recommended solution and action plan.
This supplier had frank discussions with us about what drives cost in their business. They told us what factors they were vulnerable to and couldn’t control, so we could anticipate cost changes as we watched raw materials prices fluctuate.
We did not have metrics in place to measure a supplier’s performance, so they established the right metrics and measured their own performance. That was extremely positive behavior.
They were great at anticipating our needs. They often thought of something before we did, or they came up with a solution to a problem before we even knew we had the problem. That was delightful. They worked hard to stay ahead of the game.⁴⁰
No doubt you have had some of the same experiences with suppliers or sellers. Now and then, someone does something remarkable to serve you, or he or she behaves in ways that always distinguish him or her from others in the same business. By calling these acts behavioral differentiation, we are labeling something everyone has no doubt experienced as a consumer or a buyer in a business or other organization. Furthermore, it’s common sense that when you are exceptionally well served, you tend to return to that place of business; conversely, when you are treated poorly or indifferently, you tend not to return. Why would you? The mystery is not that businesspeople don’t instinctively understand positive and negative behaviors, but that knowing the difference and knowing the effect on customers they nonetheless sometimes act in ways that customers find manipulative, indifferent, unhelpful, guarded, dishonest, or blatantly self-serving. Yet it happens all the time.
We asked the purchasing executives in our survey whether suppliers’ positive or negative behaviors had any effect on their decision to choose particular suppliers. Almost to a person, they said, “Absolutely.” Dave Gabriel elaborated: “There is no question about it. In the end, human behavior is a very key element of any relationship. Behavior drives communication and trust, and without those you rarely get to root causes or business understanding about what each of you needs to be successful.”⁴¹
Of course, even great behavior won’t overcome a shoddy product, ineffective service, or an unjustifiably high price. Behavioral differentiation is not a substitute for other forms of business excellence. You must produce superb products or services, and you must do so at a competitive price. However, when product and price are relatively equal, behavior can make the contract-award-winning difference. As one purchasing director indicated: “If all you can do is offer low price, that’s not enough for us. Offering price is often the easiest thing, but there’s a whole lot more you can offer customers.”⁴²
In the past century, there have been dramatic shifts in the approaches to and methodologies of selling, although many writers of books on selling today continue to promote outworn techniques that may have worked in simpler times but are inappropriate and ineffective in today’s complex business organizations with their professional purchasing staffs and institutional uses of supply chain management. Today, the ethos and practices of selling are much closer to those of professional services firms than they are to the sales force models that were dominant in large commercial businesses in the years following World War II. To be effective today, people engaged in business development must be as smart and well educated as the supply chain management professionals they are dealing with, and in this age of commoditization, they must know how to use behavior, not price, as a primary source of differentiation.
1. We argue in this chapter that purchasing is becoming more professional and that supply chain management techniques are transforming how buying and selling are done in the B2B business environment. This evolution will be more advanced in some industries than in others, although eventually this movement is likely to transform all B2B commerce. How is it in your industry? How have B2B buying and selling changed in the past twenty years? What are the implications for your business?
2. Who in your organization is responsible for business development? How savvy are they about supply chain management concepts, tools, and techniques? To what extent are they able to act as thought partners to your customers who have already embraced supply chain management?
3. Today, most purchasing executives want suppliers who are open with information, who are willing to discuss the cost drivers in their business, who are innovative and proactive about bringing new ideas forward, and who are candid about communicating issues and problems. To what extent does your company do this? Candidly, do you think of yourselves as supplier partners? Or are you still in the mind-set of producing and selling products?
4. In this chapter, we identified a number of positive and negative differentiating behaviors. Review those sections and do a candid self-evaluation. How often do you behave toward customers in ways that reflect the positive differentiating behaviors? And how often do you or your people behave in negative ways? Have you been known to overcommit and underdeliver? Do you do only what’s stipulated in the contract and pull out the contract to resolve issues? Do you try to go around the purchasing agents and sell directly to the “C-level decision-makers”? Do you still have glad-handing salespeople taking customers to ball games but adding no other value? Or are you delighting customers by helping them take costs out of their business, sharing ideas and people, and doing whatever it takes to look out for them?
*Companies like McDonalds and Wal-Mart are B2C companies in that they sell their products to consumers. However, they are major buyers of goods and services as well, and the companies that sell to them are B2B firms. We are discussing them in this chapter because, in this context, they are customers.
*Likewise, in government circles such as the Department of Defense, procurement professionals are required to complete more than 600 hours of training to be certified, and the U.S. government is the largest buyer of goods and services on the planet.
*The traditional advice to salespeople is to discover customers’ wants and needs, which are partly psychological, and then sell to those wants and needs. Professional purchasers seek to take the psychology out of the equation, which frustrates traditional sellers—to the point where they try to avoid those purchasing professionals and sell directly to users.