A Logistics Perspective: Being a Preferred
Achieving preferred supplier status is one of the best
strategies for ensuring a long-term relationship with your key
customers. In this and the next three postings of A Logistics
Perspective, we will: 1) explore the role and meaning of being
a Preferred Supplier, 2) identify the attributes common in preferred
suppliers, 3) share some successful methods to gain (and maintain)
that status, and 4) provide helpful tips and insights as well as
reveal some pitfalls to avoid.
Being your customer's preferred supplier means that your enterprise is
perceived to provide services of higher value to that customer than
the corresponding services of your competitors. In this regard,
preferred supplier status goes beyond product and price to comprise
the set of activities that define "doing business with you."
Typically, these activities include fulfillment, order management,
billing and collection, claims and returns, sales and communications,
special services, and adherence to the customer's instructions and
requirements and the total cost of doing business. Collectively, these
determine what is required to do business with you.
Beyond the activities themselves, it is the manner in which they occur
that will make the difference. More than just the "whats", it is the "hows"
that will form the basis of your customer's perception of your
performance and shape his evaluation of you as a service provider.
Above all else, a preferred supplier is seen as one that is easy
to do business with!
So, what are the characteristics of a supplier that is easy to do
business with? Since we are all customers ourselves, we can think of
those suppliers (to us) that we like, frequent, and often rely upon.
With a specific example in mind, it is a straightforward process to
identify those things that differentiate our preferred suppliers.
Let's take the case of transportation to and from the airport (being a
"road warrior" this is a category close to my heart). There is a
variety of products (and prices) available at all major airports:
buses, taxis, courtesy vans, rental cars, personal cars, "public"
limousines, "private" limousines, etc. In my case, I frequently travel
long distances and arrive home at late hours. A high level of comfort
and service is important to me at these times and I usually choose a
private limousine service. There are several limousine companies I
could choose from and I have tried many of them. It didn't take long,
however, for me to identify one in particular that I preferred doing
How did I single out a preferred supplier? I had found that all of the
companies offered similar services, but one in particular provided
something else. Airplanes often arrive late and, sometimes, flights
are cancelled. At other times, I find I must change my flight at the
last minute. With most of the limousine services I used, I found they
couldn't (or wouldn't) make the necessary adjustments to accommodate
my last minute schedule revisions and I would drag my weary bones to
the long taxi lines and ride home in a clearly inferior level of
comfort. However, one supplier was always able to adjust to my
circumstances. Even though in more extreme circumstances there might
be a price increase, the fact that I could count on them being there
was clearly a greater value to me. I perceived their services as being
clearly superior – they were, therefore, providing greater value. They
were my preferred supplier and I would use them all the time,
just in case I would have a last-minute schedule change.
In logistics terms, we would identify the differentiating
characteristics of the preferred limo service in terms of
responsiveness and flexibility. These are, in fact, 2 of the
attributes defined by the Supply Chain Council that shape logistics
performance. There are several others and they all will be reviewed
Rewarding and Incenting Customer Service
Representatives (Part 4)
We are pleased to provide the fourth article in the series on
"Rewarding and Incenting Customer Service Representatives." Now that
we have completed our discussion on the prerequisites for effective
rewards and incentive programs, we will now begin to discuss the "how
Provide immediate recognition
Your customer service representatives have two audiences that they
perform for: co-workers (including management) and customers. Both
audiences constantly observe your customer service personnel. When
employees are "caught" doing something right (at exceptional levels),
you need to provide immediate recognition. As previously mentioned, it
is critical to reward the behavior you want repeated. If the reward is
immediate, the benefits realized will be even greater.
Forms of rewards for immediate recognition don't have to be expensive
or complex to administer. Movie tickets or gift certificates to
popular restaurants or a local mall are examples of simple, immediate
rewards. A more complex, yet highly effective incentive, is a program
where customer service representatives earn points for exceptional
levels of performance and are allowed to select from a menu of larger
prizes. The more points they accumulate, the more valuable the prize.
Another key aspect of immediate recognition is to make it public. When
a customer service rep receives a "kudo" (whether from a peer within
the organization, or a customer), post the memo/email for all to see.
A physical "kudos corner" can be a wall in a common area that
employees frequent, with a big sign. As kudos are received, place them
in simple frames and post them on the wall for all to see. This can
also be highly effective when you are providing customers a tour of
your facility; they will get a kick out of seeing kudos provided to
your customer service personnel from customers and other employees of
your firm. If your firm is geographically dispersed, create a
"logical" kudos corner by posting the kudos on your intranet.
Though not a form of "immediate" recognition, you should also
acknowledge your "exceptional performers" at your town hall or
all-hands meetings. Having a senior manager of your firm read a very
brief synopsis of the situation and naming the individual(s) will go a
long way towards increasing your customer service personnel's desire
to perform at exceptional levels.
Finally, if you wish to put in place an effective immediate
recognition program for your customer service representatives, ASK
THEM what they would find rewarding! The ideas provided here could
serve as fodder for that discussion.
In the next and final edition we will discuss Financial Incentives.
View previous articles in this series
Becoming a Preferred
Rewarding and Incenting Customer Service Representatives
Contest Winner Submission
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A strong supplier
relationship is important for both the supplier and the buyer. For a
look at supply-management from a buyer's perspective, check out Frank
Bannister's article in ComputerWeekly.com, "How
to negotiate a better supplier deal."
Contest Winner #1:
Grable of ADP National Account Services was one of the winner of our
recent "Rewards and Incentives" contest, designed to generate unique ideas
for rewarding and incenting customer service personnel.
her submission, Ms. Grable writes:
"As an incentive to
provide World Class service, we have a quarterly compensation plan that
focuses on both quantitative and qualitative metrics. In addition,
we facilitate business fun campaigns that promote focus on the metrics,
client satisfaction, call handling skills, (target skills that increase
client satisfaction), and team building."
full submission can be viewed on the Customer Centricity website.
About Customer Centricity, Inc.
We strengthen overall company performance through
better service delivery and management.
We boost efficiencies in front-line customer service and technical support
teams, order processing, fulfillment, field service, logistics and other
key operations functions.
In short, we align the resources of your organization to exceed your
customers' expectations in the most effective and efficient manner
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