Do you really know how your customer views you as a supplier?
How do you define your relationship with your customer? Do you think you have a strong, high-level relationship? If you asked them, would they say the same thing about you? Everyone likes to think they are a strategic partner. It can be common for suppliers to overestimate, and even take for granted their supplier classification with a big chain.
Everyone has a different definition of partnership. It does help to know how chains define a true partner. Think of your own company, and one of your suppliers who you consider a partner. You probably trust them implicitly, are involved in each other’s business and success, you meet on a regular basis, and work together on solutions for the future. You think of them first for key initiatives, and you wholeheartedly recommend them to others.
As part of my business I do ongoing research by speaking with people in key positions along the go-to-market process at various chains to gain insights. Below are few selected anonymous quotes from leaders at major QSRs as to how they define partnerships.
“Is there anything you can do to save complexity from our business – this is a value add to us.”
We all know that complexity and labor have become a huge issue in QSR and beyond. Clearly, those thinking ahead to remove that complexity makes the job of this person easier and clears a path to a product getting launched.
“Partnership brings front end innovation.”
Great ideas and innovation come from everywhere. You must know your products and how to apply them to your desired target, in a way that makes sense for them.
“A partner is someone that I trust... there to help, willing to think of doing things differently. Truly collaborating early on to move things faster.”
Great partners work to anticipate need, and solve problems before they become problems, or help a customer see a trend or need coming their way.
“… They invested heavily and came to the table with culinary, strategy and a platform. They decided to grow the business with us.”
Great partners also really know their customer’s business, and bring a cohesive approach that is on trend and relevant to what is happening today. When you do this, you can grow alongside a customer.
So, who are you as a supplier?
One customer I interviewed had a really nice way of looking at this and categorized suppliers into three buckets:
A strategic supplier is someone the brand shares long term strategies and goals with, and then you as the supplier are sharing back efficiencies, capabilities, market knowledge, innovation, and what you’re investing in. You would meet more often – say meet monthly or quarterly, talk weekly, and product is key and core to their menu. This type of supplier would bring innovation to make the customer’s life easier, and they would support test products, and also support with distribution. Imagine if you will this could be a beef supplier to a major fast casual burger restaurant. At that level you’re probably providing much, much more!
A preferred supplier might help aggregate supply across brands and distribution channels.
The product is ancillary to the business but still important, and likely the business size is reduced quite a bit from a strategic supplier. The support you provide as a supplier should be appropriate to business size, so you might meet a bit less in person, talk a bit less on the phone, and be expected to provide innovation, efficiencies or market knowledge but at much less of a level than a strategic supplier. An example here might be a supplier of bread to a restaurant group that owns 2 or 3 brands – and you provide them with the hamburger buns across their brands.
This is a supplier of low business importance. You might meet or engage only once per year and this type of business is going to rely heavily on price. The product is not core to their business and there is low differentiation. An example here might be the supplier of ketchup packets!
Are you the burger, the bun, or the ketchup packet?
It helps to remove labels of “good” and “bad”, and look at the facts of your relationship. Know who you are and how important you are to your customer, and then think through any ways you may be able to move yourself up that ladder. It’s OK to not be a strategic supplier, as long as you know it and are providing the right type of value for your customer at your classification. The most important thing is – don’t think you’re the burger, when in actuality you are the ketchup packet!