Excellence in managing the business-to-business customer relationship

The main aim of the research was to identify and evaluate best practice in managing business-to-business customer relationships. This was achieved by:

• evaluating existing literature about business-to-business customer service
• identifying what selected organisations regard as good/best practice in business customer service provided to them by their suppliers
• identifying and evaluating the components of best practice from the perspective of the customer
• examining the impact of organisational structures, processes and individual competencies and behaviours on business-to-business customer service
• recommending a framework for action.

The research findings are based on extensive research in the business-to-business sector. In-depth, qualitative interviews with senior managers and executives were conducted using a series of open questions which were framed taking account of previous studies in this area and detailed pilot work. The research took place in a number of small, medium and large organisations from across the UK and from a cross-section of sectors. The organisations involved ranged from multi-nationals to small and medium enterprises (SMEs) employing between 25,000 and eight employees.

The main findings of the research are that:

• Customers like to be respected and well-treated. They are not interested in their suppliers’ problems or internal politics; they like to work through one trusted individual who adds value and is prepared todevelop the relationship
• Customers are particularly keen to work with suppliers who offer quick solutions to their problems, speak the same language, and offer support and guidance alongside a long-term commitment
• Customers want suppliers to suggest how the relationship can be developed and come forwardwith suggestions, recommendations and alternatives. They look for well-trained, knowledgeable and trustworthy individuals with highly developed customer service skills
• The contract and its construction are seen as the foundation of the business-to-business relationship and determines the supplier action. The negotiation process will indicate to a customer how a supplier will subsequently perform and has a bearing on choice of contract. The key elements of a contract are price and people
• Customers almost exclusively blame suppliers for the breakdown of any contract or relationship. However, for their part, customers need to pay attention to the needs and wants of their suppliers, eg. by ensuring the tendering process for contracts is transparent and streamlined
• Existing suppliers with expert knowledge need to work with their customers so they can offer added value to the contract. New suppliers to a market are viewed with scepticism; to counter this, they need to develop high level customer service and negotiation skills
• Communication is essential and key to success; it needs to be regular, at the right level, and consistent.
• Complacency, lack of responsiveness and failure to deliver lead to customer frustration and a breakdown in the business-to-business relationship
• Suppliers should have clear policies, procedures and protocols that ensure each customer is treated fairly and consistently
• Most customers will pay a higher contract price to get higher levels of customer service. Good customer service does not mean a high sales-based culture which is seen as aggressive and is not welcomed. Customers dislike organisations that ‘talk big’ but ‘deliver small’; they like those who are flexible and responsive
• Customers are reluctant to commit to one lone supplier, preferring to spread risk. They are concerned about how much ‘power’ a single relationship hands to the supplier and dislike those suppliers who abuse their ‘power’ and are arrogant. Organisations that are monopolies are feared the most.

As suppliers grow they can begin to compete directly with their customers in the same market. This can create obvious conflicts of interest. Customers are aware that there exists a tangible breakpoint where changing suppliers for material or financial gain is worth the trouble. Changes in customers’ strategic thinking and organisational structures can act as a catalyst for an almost immediate demand for changes in suppliers’ working practices. Suppliers may also have more expert knowledge and they can help customers in their procurement processes and in the pricing of their services.