Defining Customer-Supplier Relationships and Customer Satisfaction

Estimated reading time: 8 minutes

Steve Williams, president of The Right Approach Consulting LLC, and a veteran executive in the PCB and EMS industries, speaks with the I-Connect007 team about customer-supplier relationships, and how you can ensure customer satisfaction.

Stephen Las Marias: From your many years of industry experience, what are some of the challenges that you have seen when it comes to dealing with customers?

Steve Williams: Every company looks at their customers and they rank them, whether they use A, B, C, or the top 10 customers, whatever it is. They rank their customers based on revenue, ease of doing business, a whole bunch of attributes, and they do scale their service levels around where that customer falls in that ranking. The customers don’t know about that. So, a lot of the challenge is keeping those customers satisfied, but still staying within the constraints of your organization and their expectations of how much time and effort you put into the lower tier customers, if you will.

A lot of times, everybody says, “Well, the customer’s always right,” which we know is not true, but sometimes you make business decisions on whether you’re going to keep this long-term customer happy as opposed to doing what’s right for your organization. So, balancing that customer satisfaction versus what’s in the best interest of the company, especially when you’re talking about problems, quality issues, or product that may be suspect. If you’re just watching out for your company, you think, “Well, the product is actually within specification.” But knowing that this is an A customer or a top tier customer, you may treat that situation differently with those customers than you would a C level customer. Balancing that customer satisfaction versus keeping your business profitable is probably one of the biggest challenges.

Barry Matties: I think this analogy also applies to internal customers as well. Does the guy in the drill room realize he’s a customer and is he going to the supplier proactively? And if they’re not nice people in the drill room, the guy sliding the panels may not be as customer-centric as he could be or should be.

Williams: I think there’s an aspect to that, in that scenario of the drill room. They’re drilling panels and they’re feeding the plating department. They’ve only got one customer. They have one internal customer that’s going to get their product when they’re done, but the dynamics between those two departments certainly influences that cooperation. That customer-supplier relationship is the same, whether you’re talking about internal departments, raw material suppliers to your organization or between you and your external customer. I think the rules of engagement are the same with all those levels throughout the supply chain.

Andy Shaughnessy: How far would you go to please a customer?

Williams: It’s interesting. I had that conversation recently with one of my PCB clients. They were talking about all this business they inherited and picked up when one of their competitors went out of business recently. The owner said, “You know, I guess we kind of know why they went out of business now.” All these customers have low-level products, low technology, low quantities, but they’re probably some of the most demanding customers of their entire customer base. The top customer, from a revenue standpoint, I mean they can be as nasty as they want to be and you’re still going to treat them and bend over backwards to satisfy them. It all depends on how good of a fit they are for your organization, and what those rules are going to be in dealing with that customer.

And it all comes down to money, right? Right now, though we’re coming off some decline in the industry, people were filling up their shops with whatever work they could find. Now that they’re starting to get busier, a lot of the people I’ve talked to are starting to purge some of those customers that they needed last year just to keep their head above water. And now that they’ve got some more preferred customers, they’re no longer a good fit. So, I think that all kind of goes under the same bucket.

Matties: Being able to know how to define your customer, I think, is critically important.

Williams: Yes, that’s a good point. Again, for the most part, a lot of companies know what a good fit is, but sometimes they’re forced into taking business that they wouldn’t otherwise take.

Matties: What is your advice to our readers when it comes to customer service?

Williams: To me, if I’m reading something like we’re talking about now, the takeaway I’d be looking for is how I will provide that service level that my customers are demanding. What’s important to them? It’s all about understanding what the customer’s needs are and analyzing if we are currently providing that or not—and how do we adjust if we’re not? Whether that’s an internal department hand-off, dealing with your supplier or your customer, it’s understanding what they expect out of you as a supplier or a customer, and if you are giving it to them. When I talk about customer service, I always use the automotive example. We’ve all gone into a dealership to have some work done, right? And you go to pick your vehicle up, and they tell you, “Hey, someone’s going to call you in a day or so and ask you to take a quick on-the-phone survey.” Then they tell you that, “You know what? It’s going to look really bad for me if you don’t give me a 10 all the way across the board.” That kind of information makes you question all the customer service awards that the dealership has hanging in their lobby, because you know that they’re influencing how customers are reacting. And they do that so they can announce that they’ve got the highest customer satisfaction ratings compared to their competitors, but it’s not really information that’s going to help the company get better. And that’s what people want to know. How do you figure out what your customers really want from you in a meaningful way? That’s what I think is missing from a lot of the customer analysis that we do. People tell you what you want to hear, or it’s skewed by a recent experience and that’s not always helpful to the business.

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