There is no debate regarding how critical the supplier-client relationship is within the procurement industry. And while much has been written about how procurement can improve relationships with suppliers—especially with the current supplier-centric economy—far less has been published discussing how suppliers can become their customers’ supplier of choice.
Our six-step guide helps address this issue, offering insights on several ways to become your customer’s supplier of choice. We explore how you can stand above the rest, especially to large enterprise companies.
What Defines a Customer’s Supplier of Choice?
Competition to become a favorite supplier is fierce. The vast amount of competition among suppliers creates a lot of noise in the procurement world. It’s not easy to try and sift through the suppliers to find those that can deliver.
But the good news is that once procurement teams find a preferred supplier, they tend to stay with them for the long haul—and a steady and happy supplier-client relationship is great for everyone.
So, what makes a supplier a favorite? Plenty of things set suppliers apart in procurement today. One of the first things is being easy to work with. The last thing anyone wants or needs is difficulty dealing with a supplier.
Another thing that makes suppliers stand out is being quick to respond. But it’s not sufficient to only provide a prompt response. Instead, suppliers need to give answers of excellent quality: their replies should add value while addressing any concerns or questions. Procurement teams are looking for a seamless process marked by high-quality performance.
They also want to enlist suppliers that know how their process works. After all, the procurement industry has an overwhelming day-to-day workflow.
Tips for Becoming Your Customer’s Supplier of Choice
Procurement teams are looking for suppliers who understand their pain points, are reliable, deliver OTIF (on time and in full), and provide services where the costs attached clearly show good value for money spent (not just cost savings).
You also want to make sure you respond quickly and accurately to requests. For instance, make sure you have enough information by asking questions. Interacting with the buyer can also help them become familiar with you as a potential supplier—thus building a relationship.
In your requests, you’ll also want to show why they will benefit from partnering with you.
- Describe how you will meet their needs
- Share experiences with similar clients and projects
- Explain your methodologies and practices
- Show your understanding of the industry’s needs
It’s a lot to consider. But that is what procurement expects now. To help you prepare, we’ll dig deeper into how enterprise companies decide whether you, as a supplier, check all the necessary boxes.
How Enterprise Companies Typically Choose a Supplier
Here is a rundown of the general process enterprise companies adopt when choosing a preferred supplier:
1. Defining the Need
The first step in choosing a supplier starts with a company defining what they are looking for. This step will typically answer whether the need falls under the direct or indirect spend category and cover what the initial minimum supplier requirements will be—all before looking at a list of prospective suppliers.
2. The Shortlist
Once they pinpoint their need criteria, procurement will launch in-depth research to discover suppliers. Then they will whittle down a supplier shortlist based on which suppliers they believe can deliver. Here’s where getting your name on trusted supplier discovery platforms and search engines will benefit you, as these are the places procurement teams are searching, leading them to your company and website.
3. Displaying Information
But the work doesn’t stop there, as once they get to your website, you need to be sure that you have specific information clearly displayed—showing that you have what they are looking for. Big companies are heading to your site to see who you are, your unique selling proposition, and how it can help them.
Once you create this shortlist of possible supplier partners, procurement will usually then reach out with what is known as a Request for Information (RFI).
4. Landing an RFI
Getting an RFI is the initial goal, but the work doesn’t stop there. This next step is where the suppliers provide even more information. It’s time to get into specifics, such as delivery rates, returns, and downtime. This is where you can ideally show your potential clients a stellar on-time delivery rate, no returns, and zero unplanned internal downtime.
It’s also where you can highlight sustainable solutions and other initiatives that can set you apart from the rest of your clients, such as specific information about diversity certification or ESG operations you have currently in place. While this may not necessarily seal the deal for making you a supplier of choice, it’s vital for most enterprise companies right now.
5. Advanced Supplier Review
If you are one of the lucky few suppliers that have checked all the boxes, you are bumped up to the next step: an advanced supplier review. Sometimes, this involves a site visit to allow the client’s eyes on your operations. Here, you can set yourself apart by reviewing exactly what they are looking for and ensuring you address each of those things during this critical visit.
6. Winner Gets a Prize
If you’ve aced the initial steps and managed to set yourself apart from the rest while proving to potential clients you are indeed a viable—and the preferred—partner, you win the prize. What follows next is a setup process to make it official, including a slew of contracts and paperwork. But that is simply the cost of playing the game and scoring big.
Building Supplier-Client Relationships Is Easier with Arkestro
What we’ve described above is the standard practice, but with Arkestro, the entire process is much different.
Predictive pricing simplifies the transaction between suppliers and clients, making it easier to agree on the transaction terms and allowing suppliers and clients to build excellent relationships faster.
Combining machine learning, human behavior science, and game theory, Arkestro provides procurement teams with a list of suppliers that meet specific standards and needs, putting more spend toward preferred suppliers (including suppliers that align with ESG and risk objectives). And It’s not only procurement teams that benefit from Arkestro; suppliers gravitate to it as well. The platform was initially designed with suppliers in mind.
“If you don’t have a supplier base that believes in the integrity and simplicity of the system, you’ve got nothing,” said David Schultz, VP, Chief Supply Chain Executive at Westfall Technik.
Ready to learn more? Contact us today and find out how you can get started by requesting an Arkestro demo.