It's a New Year - What sort of customer will you be?

December 18, 2009

It's late December, and when the Christmas rush is over, our thoughts may turn to resolutions for the new year. I have a suggestionthat you might want to consider. Resolve to become a better customer.

You may be a customer buying parts or services to assemble packaging machines. You may be a customer buying $25 million packaging lines. You may simply be a customer of someone in your company who provides your department with information or a service. We are all someone's customer.

About a decade ago, industry began new procurement practices that have led to many of us becoming bad customers and have contributed to the general decline of civility in our society. I've seen the evidence of this from both sides of the aisle, and my conclusion is that we have all been ill-served.

Somehow management became convinced that nothing counted but the lowest cost. They lost site of the fact that customers often don't understand what they need or want (especially in an era of down-sizing), may ask for the wrong thing and hold unreasonable expectations. They became convinced that hard-nosed negotiations and a stubborn resolve to hold the supplier, alone, responsible for performance was the way to save themselves to success.

This procurement approach has led to many adversarial win-lose or lose-lose propositions. It achieves the desired outcome of low cost, at most, only once. In a tight-knit industry like packaging machinery, word gets around. Suppliers subscribe to the old adage fool me once, shame on you; fool me twice, shame on me.

Although there is probably no line item for it on anyone's pricing schedule, quotes for difficult or arrogant customers are higher than quotes for polite tuff-but-fair customers. Results achieved by customers who seek win-win opportunities are always better than results achieved by customers who find satisfaction in win-lose transactions. These realities should be obvious to all of us, but somehow, many of us have been blinded to these facts of life.

As the New Year approaches, ask yourself what sort of customer you have become. No matter the answer, we can all be better. We all can contribut to raising the level of civility in the new decade. And with increased civility, our companies can achieve lower costs and improved results if each of us resolve to become a better customer.

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Nice thoughts for the new year and future to come; even if civilty does not get the price desired, pounding down a supplier gets you coal in the stocking!

Posted by: chris miller on December 18, 2009

The best projects I worked on were based on both sides winning. Therefore there was give and take and working together to solve issues and problems in common. My problem was his problem and his problem was my problem. The challenge was working together to resolution and prosperity. In this life nothing is perfect the way we want but really working together can get very close to it.

Posted by: Paul Zepf on December 18, 2009

Agreed! I hate the phrase "it's just business" used to justify bad decisions. Business is actually about your livelihood, your integrity, personal satisfaction in having a positive impact on the future viability of that business -- not to mention enjoying where you spend most of your waking hours.

Behaving well and behaving poorly are options that we have control over, but they begin at the top of the org chart.

Behavior forms an organization's reputation. Organizations that respect people attract good people, and in the long run, those organizations, their customers and their suppliers thrive.

It might sound simplistic, but I think it's a good thought to start off the new year.

Posted by: John Kowal on December 18, 2009

We see a lack of civility everywhere, not just in business, witness political debate. We spend so much energy back-stabbing, et al, there's left for finding the best solution to whatever problem(s) we need to resolve. Since I hope to be hiring soon I'll keep co-operation in mind as a quality to be looked for.

Posted by: Bob Bada on December 19, 2009

Our family has operated a family business bottling and distributing liquid refreshment beverages. I believe credibility is important for both customer and supplier. It is important for the supplier to inform the buyer of questions he should want answers to as well as responding to those the customer has thought of. That approach builds credility and confidence with the customer.

Posted by: ed rice on December 20, 2009

If you're a small enough supplier, you can have a lot of say in who you choose as a customer. We try to work with companies who we like doing business with and sometimes price ourselves out of projects with the rest.

That said, I think price considerations are a progression of any mature industry. We've seen it down the industry food chain in standard components for machine controls and conveyor components. These technologies have been standardized and there is a lot of competition. That trend will continue to move upstream to machinery suppliers.

Posted by: Ben Garvey on December 21, 2009

Yes, and when something goes wrong, as it often does, you are much more predisposed to stick with someone who is paying you a fair price. It is so hard, and unprofitable, to continue to service the guy who wanted the cheapest price possible, but demands the best service.

Posted by: Jim Chrzan on December 21, 2009

When all is said and done, relationships matter. This is true whether you are on the buying or selling side. We all make buying decisions, and it's rare that price is the only consideration. When you trade low initial cost for reliability over the long haul on a capital item like a packaging machine, the costs are just shifted to the maintenance side of the balance sheet.

Posted by: Joe Biondo on January 19, 2010

About Keith Campbell

Leaders learn from the past while looking to the future - and bring both to bear on the here and now. This is the philosophy that has steered Keith Campbell's 30+ years in manufacturing. It has worked for him in operations, maintenance, engineering, R&D, education, consulting and professional organizations--and now he's putting it to work for you--taking you to the edge of his thoughts on packaging operations.

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It's a New Year - What sort of customer will you be?

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