Ask fellow business owners about their level of satisfaction with their vendors. See if you don’t hear a litany of war stories about increased prices, unfulfilled promises, arrogant attitudes, and lack of attention to details. Unfortunately, we business owners have learned to tolerate mediocre service.
For the past five to seven years, there has been more than enough business to go around in the Delaware Valley in certain sectors of the business-to-business economy. The business customer has paid dearly for the lack of pressure on the “service” industry. The competitive threat from countries like Japan and South Korea doesn’t seem to immediately affect the local service company. How does the fact that no DVD players are manufactured in the United States affect the local florist?
The business owners who feel they are immune are, in fact, something else . . . wrong. The threat of foreign competition might nor affect some people first hand temporarily, but if the problem effects their customers, it will eventually affect them. The travel agent who serves the professional trainer loses business every time the trainer loses a bid to another firm. The software vendor loses business every time his or her manufacturing customer can not compete with the prices and quality of Japanese goods.
In a way, this “reality” provides one light at the end of the “arrogant vendor” tunnel. Some of the business owners who have been acting like they are immune to competition, and like they are doing their customers a big favor, will be forced out of business.
A second hopeful sign is that Delaware Valley entrepreneurs are fighting to save their businesses. Our fuses are getting shorter and shorter. Have you noticed the change? Business owners are recognizing that shortcomings on the part of their vendors are costing them business. Several large corporations–Xerox, Kodak, and Ford, for example–provide training for their vendors to help them improve their quality control and meet higher standards. Some smaller businesses are also starting to demand quality, refusing to pay for inferior service and shopping for alternate vendors. A few have even introduced vendor certification programs similar to those used in big business.
No longer does the local print shop automatically “own” any given business customer. Companies typically use three or four printers to minimize their risk and improve control over their final product. More and more companies are selecting in-house options like desktop publishing.
Increased local competition within the business-to-business sector will also help sort out the service-minded business owners from the arrogant vendors. The proliferation of new businesses over the past few years provides business customers an ever widening range of choice. As the new office complexes are being built, the number of printers, travel agencies, office supply stores, and computer centers multiply exponentially. Paralleling the pressure on the landlords to negotiate lease prices and improve services in office complexes, the increased competition among the businesses within those complexes will soon separate the service-minded entrepreneur from the person who jumped on the small business bandwagon to make a quick profit at the expense of others or to run away from a job he or she did not like.
Plus, there is an increased number of franchises operating in the business-to-business sector. There were 498,000 franchised businesses in the United States as of January 1988. Five percent of new franchises closed in their first years, compared to 60 percent for independent businesses.
The shift to franchise operations will also help eliminate the hit-and-run artists among us.
The uncertain economy will also take its toll on less service-minded vendors. Business customers will require more tender loving care. They are nervous and cannot tell what the future will bring. Their loyalty will be with vendors who helped them during these uncertain times and not with those who hassled them regardless of price.
As a specialist in the needs of growing businesses, I frequently need to remind my clients not to take any of their existing accounts for granted. One of our corporate clients recently had to face a significant downsizing due to the sudden loss of its largest account in order to return to a growth mode and now have an uphill battle ahead of them to try to win that key account back.
There are at least three lessons to be learned.
First, this is the year for every business owner to pause and reflect on their level of service and real capacity to generate customer loyalty. It may be time to do customer surveys since so many business owners are misjudging what their customers really value.
Second, no one is immune to the pressures of increased competition, educated customers, and an uncertain economy.
The third lesson may actually be a plea to the business community. Not all of the business-to-business “service” companies will make it through the bumpy road ahead. Let’s make sure we keep the ones who are trying to do things the right way. Think about who deserves to get your repeat business. Let’s not inadvertently lose customer-oriented people who deserve our business because we have been too busy to make a purchasing decision. It’s time to review our vendors and not contribute to the profits of “arrogant vendors.”
Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions. Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companiesachieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search. 2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.