Management Today has an interesting article about bullying in this month’s edition. No, not online bullying or workplace bullying, but B2Bullying. B2Bullying is what happens when a (typically large) buyer makes continued unreasonable demands on a (typically small) supplier. In many cases, the buyer represents a significant proportion of the supplier’s business.
The scenario is this:
“Our biggest customer is a bully. It never pays us on time – every piece of work we do for it has to be followed by a flurry of emails and phone calls demanding payment – and the boss of the company is rude and arrogant. If I had my way, I’d tell them to shove it, but the work we do for them represents 35% of our sales. Help!”
Jeremy Bullmore dispenses sound management advice about how to handle such a client. He is Management Toady’s agony aunt and a former chairman of J Walter Thompson and his response is solid and pragmatic, but it begs the wider question about what a typical or even excellent buyer-supplier relationship should look like.
The Deep-Insight View
Here’s our take on the subject.
In the business-to-business (B2B) world, long-term relationships can only be built on a foundation of mutual trust and cooperation. Academics talk about exchange theory (think of an exchange between two equal partners rather than a traditional buyer-seller model) and equity theory (the exchange has to be seen to be fair and equitable by both parties involved in the transaction. Indeed, a long-term relationship is based on a series of such fair and equitable exchanges.
That’s not to say that from time to time one or other party gets the short end of the stick on a particular transaction. However it evens out in the long run and both parties feel pretty comfortable with a bit of give and take. You scratch my back and I’ll scratch yours. Or even: “You need to help me out this time but don’t worry, I’ll make it up to you later.”
Long-term relationships built upon such transactions. But if one party (often the larger party and typically the buyer) starts to B2Bully his way or continues to usurp his position of power, the relationship is doomed. It will eventually fizzle out. If you read between the lines – Jeremy is saying that this is a one-sided arrangement. It’s not a true partnership. The supplier needs to lay down some ground rules for the buyer if in a position to do so. If not, the supplier should grin and bear it for the moment but work towards a dissolution of the so-called partnership when the timing is right. If your biggest customer is a bully, think about getting out of the relationship – at a time that suits you.
What does ‘Good’ look like?
On the other hand, an excellent buyer-supplier relationship is one that will stand the test of time. Such partnerships are based on those principles of exchange and equity. You’ll recognise the signs. The parties in the relationship trust each other implicitly. They are committed to helping each other. Both parties collaborate on joint initiatives. They innovate together. Rarely do they wait for RFPs to be issued – they bring ideas to each other. They have an emotional bond that makes it extremely difficult for a competitor to get a look-in.
Customer Relationship Quality
So, what’s the quality of your relationship with your top clients? If you’re unsure or if you think your biggest customer is a bully, why not contact us today and we’ll check out your Customer Relationship Quality (CRQ) for you.