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Asking Good Questions Leads to Having Best-in-Class Customers
In a workshop with a client’s supply chain executives, we were discussing the attributes of a best-in-class customer. An executive provided her definition:
“Big orders, reasonable prices, quick payments – those things are obvious, I guess. But in a broader context, I think of three things (in defining a best-in-class customer). First is the information flow, the communication between the two firms. My best customers tell me what I need to know in order to be successful. They share their forecasts, their plans, their headaches, etc. They don’t keep us guessing and, as a result, we have a chance to be successful.”
The group’s response started off humorously, but evolved to provide some sharp insights that triggered an active debate among the workshop’s participants. They put responsibility for information flow and communication into the hands of the supplier, not the customer, arguing that most large firms today have strong supply chain organizations with multiple processes designed to attract the best suppliers and motivate strong contributions from them. They cited the quality and detail included in their requests for proposals, described the agenda items in recent supplier forums, and talked about close-in interactions with major suppliers that often involve executive-level exchanges and visits to the facilities that were relevant to the relationship.
One individual provided a very passionate summary, saying, “If there is information that our suppliers need that we aren’t providing, it’s because we don’t know about it. It’s their job to ask us, not our job to guess as to what else they need.”
Taking a Long-Term View
We agree with the workshop participants that the ongoing responsibility for asking questions rests on suppliers’ shoulders. In fact, we have long believed that proactive questioning is a key way for suppliers to avoid the surprises that can disrupt even long-standing customer relationships. Economist Paul Samuelson once said, “Good questions outrank easy answers,” yet the trick for most businesses is coming up with good questions.
Over and over, research shows that a key characteristic of best-in-class business relationships is a focus on the future. This provides a starting point for identifying good questions, such as, “What do you see as changing in the next several years?”
While customers may not reveal every change to even their strongest suppliers, I’ve heard answers to this question that have enabled a supplier to continue or even enhance the level of value they deliver to their customer:
- Plans to expand a private label to another product line that resulted in the supplier gaining the manufacturing contract for that product line
- Plans for replacing on-site construction to factory-assembled products that allowed the supplier to deliver pre-kitted products to that contractor’s new assembly site
- Plans to fill several gaps in the firm’s product line that provided the opportunity for the supplier to define a winning position as an ingredient supplier across the expanded product spectrum
Best-in-class customers do, in fact, work hard to provide high-quality information to their suppliers and create an environment in which effective communication is possible. But as our workshop participants concluded, suppliers need to take on the responsibility for questioning customers on an ongoing basis—and always look for ways to take their performance to a higher level. That means suppliers must identify and ask good questions, thinking hard about what they don’t know that might enable them to do a better job, and strengthen their contributions to their customers. They just might find that the right questions lead to easy answers from their customers that set the stage for future shared successes.