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August 24, 2022

It is easy to get busy. Producing, harvesting, grading, processing, packaging and delivering can take a lot of time and effort. Sometimes we don’t spend enough time evaluating the relationship with customers. Evaluating where you stand with the people who pay for your product is just as important as all of the things you do to get the product for them.

 

In the food industry, it is usually one business (retailer, wholesaler or distributor) buying product from another business (producers and processors). It is two businesses interacting, but it is the people in the business who make the decisions. The relationships you have are valuable and you need them to be as good as they can be. It is unlikely they will be perfect all of the time, so you need to assess what they are thinking. The quality of your relationships impact your volume and price in future years.

 

Use the interactions you have to test your relationships. Their responses to questions and willingness to work with you are great indicators for you. Listen to their answers carefully and take the time to determine if you are an important part of their supplier group or dispensable.

 

Listen to the answers to your questions

 

During my time working with a major retailer, I dealt with many suppliers. Some were interested in a two-way conversation and others just wanted to go on and on about everything in their business. These suppliers did not always listen to what I said or where our business was going.

 

Yes, you need to share information about your business and make sure your customers understand your capabilities and accomplishments. You also need to ask questions and learn about their business. Their willingness to share information is a great indicator of the type of relationship you have.

 

Their answers to these three questions will tell you a lot about the trust they have with you and if they are interested in working with you:

 

  1. How are our sales relative to the category or department?
  2. How is our service level relative to the category or department?
  3. Did our product sell-through meet or exceed your expectations?

 

The first two questions will indicate if they are willing to share information that is not public knowledge. You should know your sales and service level so if they share that your sales are better than the average you know you are better than many others. Conversely, if they indicate your service level is below the average you know you have work to do and this should be something you report on at future meetings.

 

The third question helps you understand how carefully they are looking at your products. If you are better than expectations, you know they were watching but you did well. If you are below, you need to focus on more efforts to drive sales or you are at risk of getting less volume or even de-listed.

 

Overall, their willingness to answer these questions tells you a lot. If they do not answer the questions, you should be concerned they might not trust you with the information or that your products are not on their radar. In other words, they are focused somewhere else.

 

Opportunities you receive are good indicators

 

Retailers and distributors need to plan and they are always looking for opportunities to drive sales and margin. Every time you have the chance you should be asking about opportunities. This could be based on something you saw in the store, participated in last year or perhaps saw somewhere else.

 

If they do not seem willing to work with you on opportunities, there could be an issue. Perhaps your competitor already got in there or they were frustrated with your service level last year and want to work with someone else.

 

If they put several opportunities on the table you should assess what is right for you and exceed their expectations. If you are getting opportunities, your relationship is probably in a good place. They usually want to work with people they believe will deliver, not be a frustration.

 

Get past your key contact

 

Retailers can be large, complex organizations. If you have a good relationship with your key contact, they will introduce you to others in their business. People who work in food safety, operations, logistics or supply chain are always good contacts to have.

 

As you develop relationships and volume grows, it will be important to know who to work with on different issues. The category manager will always be the key point of contact and when they trust you, they will introduce you to others.

If they are not willing to introduce you to others in their organization, you should ask yourself why? Is it a trust issue or do they want to avoid wasting the time of their colleagues?

 

When you are a trusted supplier, you will get to know people throughout their business.

 

Future planning is a sign of a good relationship

 

Most retailers are making plans for the future. These could be related to merchandising fixtures, merchandising programs or store openings/renovations. Awareness of where they are going helps you to be a better supplier.

When you ask the question about future plans their willingness to share is a good indication of the relationship you have. They might not always know the answers but if they do or perhaps get back to you it is very positive. This is an indication they trust you and see you as an integral part of the plan moving forward.

 

If you cannot get any answers you need to decide if they have the information and are not willing to share or simply do not want to share. There is a difference.

 

Problems can strengthen relationships

 

Most retailer/supplier relationships will have some problems. These could be recalls, competitors with better ad prices or quality. The response and the resolution to the problems will tell you a lot about your relationships.

 

If you are proactive and transparent, a problem can actually strengthen your relationship.

 

Take the time to assess your relationship with your customers. It is a lot of work to produce products and get them delivered, but it is also a lot of work to develop relationships. When you know where you stand, you will know what work you must do. Good relationships can pay a lot of dividends for your business and separate you from your competition.

 

 

 

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Submitted by Peter Chapman on 24 August 2022