What you won’t do to keep your customers

10/27/2011

Although they'll tell you differently, buyers only want a steady stream of acceptable quality parts. Stripped to its essence this is why a customer does business with you. Kindly notice I didn't mention "low cost." The most common excuse my clients tell me for bad business practices is they need them to keep their existing customers base. Here are some "games" suppliers get sucked into as willing participants and knowingly lose money "in order to keep our customers."

Part Cost

Anytime a buyer chants the mantra of "Cost Is King!" and further mentions that excess freight is not his problem, ask about the concept of "Total Cost" or "Cost of Goods Sold" or any of the other accounting terms that add up all the money spent to produce a product. While expedited freight might not come from the purchasing budget, the check sent to the freight company has the customer's name on it.

If Cost truly was King, he wouldn't have expeditors on the payroll because he'd choose his vendor base so that expeditors were unnecessary. When questioned intently, all buyers will tell you they'd gladly pay a higher part cost if there was a solid foundation of delivery performance....
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