The importance of customer relationships for your organization

The importance of customer relationships - waitress taking a customer order

In business, maintaining good relationships means everything. If you’re burning bridges with every transaction, even your vendors are going to become opponents instead of allies. Strong working relationships between suppliers and customers are entirely possible, but it takes trust and transparency on both sides.

Businesses and suppliers carry equal responsibility for the successful execution of major projects as well as the long-term health of the initiatives they’ve put into place together. Businesses need to provide suppliers with clear direction on precisely what they want in terms of outcomes and their overall expectations for projects. Furthermore, businesses need to make sure their own people are learning and that they own their own delivery model instead of simply accepting one that’s put upon them by someone else.

That may sound simple enough, but it can be challenging to shape a commercial agreement that reflects what your organization truly wants when it’s so much easier to agree 100 percent with the supplier’s recommendations. While building a great relationship will always take time, ensuring that your business is approaching projects as though you’re on the same team (with the same end goals) as your supplier is a step in the right direction.

Of course, since businesses are run by people, mistakes will happen. One of the most common mistakes is taking how the supplier works for granted and assuming the supplier can answer all of your organization’s challenges on its own.

This is where transparency and good old-fashioned honesty becomes critically important. Yes, it can be painful for company executives to admit that they were wrong. It can be equally painful for highly knowledgeable suppliers to admit there are certain skills that they lack. Once you’re able to move past the instinct to bluff your way through a project that tests your limits, and instead be clear about your strengths and weaknesses, you’re likely to arrive at successful outcomes much quicker.

Businesses should also be willing to stay tuned to the health of their working relationships with suppliers. Contracts matter far less than the working principles of the people on the ground.  Both parties should have a vested interest in a productive and successful outcome. Consider this story that illustrates what NOT to do when it comes to accepting a working relationship without question.

Recently, one of the biggest banks in the world had a relationship with a large IT supplier for its global application development. A contract was signed at the beginning of the working relationship and then promptly filed away, essentially disappearing from the organization’s collective consciousness. That contract had a clause stating that if the IT supplier delivered code with any errors, the bank was responsible to pay the supplier to fix the faulty code above and beyond what it had already paid to have the code developed in the first place.

The result was that the bank fell into the classic change control trap and essentially a double-dipping scenario that cost the bank roughly twice what it originally agreed to. Unfortunately for the bank, the clause wasn’t discovered until five years later, when a new IT manager reviewed all of the existing contracts.

While that may seem like an extreme case of a working relationship gone wrong, it drives home the point that businesses need to maintain a continuous and healthy heartbeat of the relationship they have with a supplier and do their share of due diligence when it comes to getting what they expect from suppliers.