Make Love, Not War
The advantages of good supplier relationships
All retailers want to win their customers' trust, but cultivating their
suppliers' good will can be just as important. Retailer-manufacturer relationships
based on trust rather than intimidation bring big rewards, according to
an article in the Harvard Business Review.Among them: suppliers who
share information with you, take time to learn about your business and go
the extra mile for you when you're in a pinch.
The article spotlights British retailer Marks & Spencer as a champ
at building good relationships with its suppliers. (The store is just as
good at cultivating consumers' trust. See "In Marks & Spencer We
Trust," Professional Jeweler,April 1998, p. 94). Thanks to this
skill, the store has almost no supplier turnover. Some manufacturers have
been selling Marks & Spencer for more than a century.
Two-way communication is one secret to the retailer's strong marriages
with vendors, the article says. Marks & Spencer's CEO meets regularly
with suppliers to hear their opinions and suggestions. Regular suppliers
are even granted a keycard so they can enter the Marks & Spencer's head
offices at any time to discuss problems.
The retailer also tries to ensure all suppliers get a fair share of the
business, and that when it wants to decrease orders from a supplier, it
does so gradually, over a few years. Marks & Spencer suppliers have
the ability to appeal buyer decisions to higher executives, the article
says. They also get full explanations of the store's policies and actions
and are invited to visit stores to see how their products are displayed
When Marks & Spencer signs up a new supplier, meetings are set up
between its own buyers and merchandisers and the supplier's employees; the
retailer also visits the supplier's factory several times.
Moving from an adversarial relationship with suppliers to one based on
trust often calls for wrenching changes in retailers' attitudes and organization,
the article says. Many parameters for measuring employee performance have
to change. In addition, retail buyers need to be replaced by "relationship
managers with appropriate bedside manners."
Suppliers Try Too
Does good service make a difference? Andrew Ban of Leslie's, a chain
importer headquartered in Greenwich, CT, thinks so.
"In the 1990s, service is becoming more important," he says.
Leslie's, for example, offers customers an unconditional guarantee: if a
chain ever breaks, return it for a new one. "We've always done this,"
Ban says. "But only in the past few years did we start to advertise
it. This differentiated us from other [chain companies]. Quality differences
are slight, so the only place we can make a difference is in service."
One of the biggest complaints by retailers involves the return policies
of manufacturers, or lack of them. "If something breaks, it's like
pulling teeth to get them to do anything about it," says one retailer.
"They want to sell to you, but when it comes time to support you,
a lot of them don't do it willingly," says another. Asked if retailers
abuse Leslie's return policy, Ban says a few do. "But most like to
know it's there if they need it."
by Jack Heeger
Copyright © 1998 by Bond Communications.