Winning Back Customers
The Challenge
To respect the competitive advantage that our Customer has got from the Strategic Customer Growth Process, Company names have been changed.
A few years ago, a world-class Supplier* is sitting around a board room table with their key Customer*. No, they aren’t negotiating the next contract or arguing over a price increase, but instead they are talking…strategically… jointly, to come up with solutions to grow TOGETHER!
The key Customer to the Supplier…
“It’s a pleasure for us to know that you are open to drive performance and delivery – this is critical to us. To be able to agree on this TOGETHER is brilliant – this is a great Process. We have decided to risk all the business with you and this is a huge responsibility.”
The Supplier commented…
“This process has highlighted how weak our suppliers were and what we must have been like to deal with. We are certainly aware of our responsibility to you and promise to give a lot of our time and attention internally talking about how we can make it better for you.”
However, it wasn’t always like this. 3 years earlier, before Argil’s Strategic Customer Growth Process™, there was NO relationship between the two companies.
“The Supplier saw us as a cash cow – they were only interested in our monthly ‘order’ to fill their factory. We needed this key supplier to add value to our business; instead this was from our perspective a ‘high management’ relationship, which revolved around delivering on the basics – Quality and Service Delivery.”
The MD and Sales Director of the Supplier called Argil™ and explained their situation.
“We have come through a period of inward focus, having been engaged in re-engineering ourselves in terms of world-class manufacturing standards and systems. We have relied upon our Sales Team to maintain the connection with our Customers but our focus on the relationship has slipped.
The Customer dialogue has become increasingly concentrated upon price. The danger with this is that we may become perceived as a supplier of commodities. We now have an urgent need to re-establish our differentiation as a Strategic Partner to our Customers.
For the next 3 years, Argil was engaged to help the Supplier get closer to their key Customers, understand their needs and help drive a value Partnership.
The initial objective was to find the real reason why this key Customer had defected, and what needed to be done to improve the business relationship
During each workshop at the end of the Process, quantitative and qualitative results were shared and joint strategic actions were developed.
The Result
Over this 3 year time frame, measured results show how the level of Customer satisfaction and loyalty moved from the Zone of Defection towards the Zone of Affection.
Some of the comments made from both the Supplier and their key Customer about the Process were:
- “Well, it’s quite simple actually… we LISTENED to our key Customer. Our Management and Team realised where we were and what we had to do to change.”
- “…as a result of the Process we are now both behaving as we would expect a Partnership to work.”
- “Our Supplier demonstrated a vision to provide a solution vs. just a commodity. Now they have integrated into our business, this showed real commitment to OUR results.”
- “Without this Process we would never have been able to tell our Supplier the truth – this used to be a high maintenance relationship. The Process took it much deeper – we would have just had a cup of tea and exchanged pleasantries. We are more than happy to take time off to do this because it adds value to us as well, they have my commitment to the Process – it is a fraction of my time vs. the value received.”
- “Our conversations now revolve around strategic issues – how can we become more efficient in the plant? How can we raise the level of service to our Customers? How can we align our systems to ensure that we don’t lose stock?”
- ‘WE’ has become a key word in the conversations now – previously it was more about ‘YOU’.
Although the CS and Loyalty ratings have been impressive, there was still the question of the financial/ revenue rewards gained as a result of the Strategic Customer Growth Process™ for the Supplier. Examples of the impact are detailed below:
- The Supplier regained 100% of this lost key Customer’s business – a $4.1m account.
“An exciting aspect of the Strategic Customer Growth Process is that it has a ripple effect within the whole organisation…what we learnt from the experience with this key Customer in the Argil Strategic Customer Growth Process, we were able to apply to our other Customers. This Process helps us to sharpen our focus continually, preventing us from becoming complacent about the relationship with our Customers.”
- The Supplier increased their share of another key Customer’s business from 55% to 95% over three years. Today they also manage the stock replenishment system for this key Customer.
- The Supplier reduced their internal waste factor thereby reducing their waste cost significantly to $460k, a major contributor to bottom line growth.
