Sticky Customer Relationships

In the September 12 edition of BusinessWeek, Jack and Suzy Welch write about customer stickiness, the concept of superior service that builds long term and loyal relationships with customers. These relationships allow for mutual company growth over time, reducing the need to continue to prospect for even more customers. The article does a great job discussing how retaining customers is the way to go. I agree. And I bet your management agrees also.

Then why are relationships we nurture with our suppliers scorned by those very managers who look for relationships with their customers? It’s all about the money. Reduce prices at all costs and relationships be damned in the process.

Relationships cost money, but it is money I am willing to pay for excellent service, trust, and the comfort of knowing that my business is being cared for. I tend to look at it as the Christmas Eve Rule.  If something goes wrong in your factory or at a customer site on the afternoon of Christmas Eve, which supplier will mobilize to solve the problem? Will it be the one with whom you have an excellent relationship (and the number of their operations manager in your cell phone) or one whose virtual operator asks for your location and customer number?

I have bought my cars from a local dealer for about 10 years. Could I do better on price? Sure. But their service is excellent. They provide free loaner cars, fit me in when convenient for me, and treat my entire family with the same respect when they come in with either routine or emergency repairs. I trust them and trust is important for me.

So, while you senior management is banging away on sales and marketing to build those ‘profitable’ customer relationships, remind them it is a two way street. Sticky suppliers are just as important as sticky customers. In fact, we can’t live without either of them.