Why the supplier experience is crucial for creating fantastic CX
Though there is so much CX-related content available about the benefits of treating your employees and your customers right, somehow the relationship with suppliers seems to be underdocumented. It’s something we take for granted. As if suppliers can only be viewed in terms of efficiency and cost cutting, with very little regard for the people behind these companies and the impact that squeezing their budgets to a minimum has on the end customers.
I believe that the way we treat our suppliers is a reflection of the way that we treat our employees, as well as our customers. Show me your SX (supplier experience) and I’ll learn a lot about your EX (employee experience) and CX. Because at the end of the day, it’s all about treating people – regardless of their function – with the respect that they deserve. But it even goes further than that. It’s not just common decency. Seeing that all companies are extended ecosystems of interconnected players – from VCs, board members, employees, customers to partners and suppliers – how they treat one group, will always have an impact on the rest.
It’s about quality
It may sound underwhelmingly obvious but if you squeeze the budgets of your supplier to a minimum, they will need to find ways to save money on their own production, materials, content, supply chain or transportation etc. And whatever they will try to economize, this will have an effect on your own customers too. If they cut budgets by using cheaper materials, your customers will receive a less qualitative product. If they reorganize their transportation for optimal cost efficiency, it could be that you will need to wait longer and, as a consequence, that your customer will be impacted by these slower delivery times.
In a highly interconnected network, moving one node or pulling one string, will impact all the others. That’s just how it works. And the sooner you realize that, the better your CX will become. Let’s say that you’re in hardware. You may try to find the cheapest batteries. But the supplier of those cheap batteries also needs to cut costs somewhere, so maybe they squeeze their own suppliers of sub-parts who have no choice but to use the cheapest materials, which in turn might probably not have been manufactured in the most ethical work environments.
It’s about ESG
And so it is not just about quality, it is also about ethics. If you want to save money on your suppliers, you’ll probably indirectly have an impact on their own employees and suppliers. And the Never Normal Customer (read my piece about that here), who worries about the world and their place in it, no longer accepts these types of unhealthy, unbalanced and morally rejectable relationships. In the current transparent market, chances are that at one point these practices will be uncovered and you will be punished for that.
But it works the other way around as well. If you treat the players in your supply chain right, then you will be rewarded for that as well. Dutch chocolate provider Tony’s Chocolonely is a beautiful example of that. They don’t just have a great product and fantastic marketing, but they were so smart as to make their supplier relationship part of the CX. In the markets where they sell their products, they have extensively communicated on the ethical part of the chocolate supply chain. This is how they describe the problem on their website:
Things aren’t being shared evenly in the chocolate supply chain. The chain starts with millions of farmers who produce cocoa and ends with the billions of consumers who enjoy chocolate. But what about the bit in the middle? This section is dominated by a handful of chocolate giants that profit from keeping the price of cocoa as low as possible. As a result, farmers are forced to live in poverty. And that leads to illegal child labour and modern slavery.
Once you know this, you can never unknow it. And that is why so many people choose to enjoy their slave free chocolate so that they can not only feel good because they are eating delicious chocolate, but also because they are helping Tony’s Chocolonely to build a better world. And it is exactly this double feel good strategy that creates such a fantastic CX.
Companies aren’t secluded islands. They are highly interconnected ecosystems and it is time that we learn to analyze and manage all the different relationships in that ecosystem in a smart and ethical way. CX is not just about the end experience, it is part of a complex system. So, we need to better understand how everything we do onto all players in that system has a potential impact on our end customers.