When the conversation is about baseball, golf or tennis, before long someone will probably mention the "sweet spot" -- that perfect point on a bat, club, or racquet that produces the most effective result. Good equipment is an essential component in the search for the sweet spot. So is a good player. If either component is missing, the results will probably be disappointing.
It seems to me that "sweet spot" is also a great way to describe an optimal supplier/customer relationship. When a good supplier and a good customer get together, the result is productivity and mutual benefits -- the business equivalent of finding the bat's sweet spot.
It's not hard to find lists of characteristics a customer should look for in a good supplier. They include things like:
- Understands customer needs
- Provides quality products
- Prices fairly
- Keeps commitments
- Provides support
- Delivers on time
- Communicates effectively
We all know there’s much more to the customer/supplier relationship than the customer ordering and the supplier delivering. The synergy between customer and supplier, much like between bat and hitter, is critical to finding the sweet spot for your business. That said, it stands to reason that suppliers need to evaluate customers much as customers evaluate them. (Other than credit approval, when was the last time you saw a customer evaluation survey that determined whether a prospect qualified to become a customer?)
That started me pondering what, really, is a good customer? How do we know we’ve found a customer that is squarely in our business’s sweet spot? Or, for that matter, how do we know we’ve found our sweet spot?
While sometimes good customers just land on our doorstep, more often they come to us through hard work. The following questions can help define where the sweet spot is and what customer will hit it:
- How many customers can our business support and to what level?
- What is the most profitably sized customer for our business?
- What value-added services do we provide, and who is most likely to need them?
- Are there any limitations we need to take into consideration when deciding whether to present a proposal to a potential new customer? Warehouse facilities; sales personnel; conflicts with existing customer requirements?
- Is this a one-time or occasional purchaser, or is there potential for an ongoing relationship?
- Do we have, or can we acquire, the resources to meet this customer’s needs?
- What is the revenue potential for this customer?
- Will the revenue from the customer justify the time and expense to support it?
- Is this relationship likely to expand to additional products and services?
- Are the customer's requirements compatible with our business philosophy?
These kinds of qualifiers can help us, as suppliers, identify customers with the potential to connect with our sweet spots. But like the relationship between a bat, club, or racquet and the person using it, there are intangibles that come into play. At the top of the list of intangibles in the supplier/customer relationship is mutuality. Suppliers have to be willing to make the extra effort, but so do customers.
A commitment to the partnership and trust are important elements of a good supplier/customer relationship. Good customers participate actively. They provide clear direction, communicate regularly, and make their expectations known. And like good suppliers, good customers keep their commitments. This is the only way to move from suppliers to partners.
There's no formula that will guarantee that every prospect that becomes a customer will land squarely in our sweet spot. However, knowing where that sweet spot is, and seeking customers who fit our "good customer" profile, will make it far more likely. It also helps ensure that the customer will become a raving fan and great partner.
Do you know your sweet spot? Do your customers/suppliers know what it is? What kind of differences would you see in your business if both you and your customer had that sweet spot match?