“‘Customers are always going to say, oh, the reason that we don’t do business with you is your price. That’s BS. Price is not the reason. It’s a good excuse. It’s your job to find the real reason.” – Victoria Meyer
A question that has come up several times recently: “Why are we the last choice for a specific customer? They call us when they’re in crisis and we help them out. Then, nothing. How do we move to being a first-choice or regular supplier?”
In this episode of The Chemical Show, host Victoria Meyer explores why some companies are the last-choice supplier for their target customers and provides specific tactics on how to become a first-choice supplier instead. She discusses the various factors that contribute to a company’s status as a last-choice supplier, including timing, limited offerings, poor reputation, and corporate fit. By understanding their target customers’ business and procurement strategy, fixing any issues in their offering, and demonstrating improvement and value, companies can become a first-choice supplier, rather than a last-choice one.
Our Thursday episodes will address key questions from listeners and strategic or tactical topics of relevance to chemical industry leaders.
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Why You’re The Last Choice Supplier and What to Do About It
Hi, this is Victoria Meyer. Welcome back to The Chemical Show. This is the first of the part 2 episodes of the week that we’re going to be starting to publish. As I mentioned in episode 100, we’re adding a second episode to the chemical Show each week. Our Tuesday episodes are following the same format you know and love, featuring interviews and insights from chemical industry leaders. The Thursday episode, this episode, is going to be more tactical. I’ll be addressing topics and questions that I’m hearing from folks in the industry, relevant news and timely happenings, and giving strategic and tactical answers and approaches.
Think of these as a quick hitter, business and execution oriented, getting some learnings around strategy, around customers, around marketing and other relevant topics. The intent is obviously just to give you a little bit more value and to give you some more insight. So I am looking for more of your questions. Send me a message on LinkedIn, leave a comment on YouTube, or shoot me an email and let me know what questions you have and what topics you’d like me to address. Here we go.
The topic I’m talking about this week is, a question that’s come recently from several business leaders that I’ve spoken with, some customers and clients that I’m working with, that have basically said, why are we the last choice supplier? And how do we move up to first place or be the supplier of choice, right? Or even just be a regular supplier versus being a spot last chance supplier. So the business leaders that I’ve talked with, let’s be clear. They are first choice suppliers for many of their customers. But like many companies, they have a target customer or target set of customers with whom they’d like to have a better relationship and be a bigger part of their business.
You know, what they’ve told me is they call us when they’re in a bind and it’s last minute and they can’t get what they need from anyone else and we help them out. And then nothing, right? We want to be in the regular supplier mix. And my guess is this has happened to you. I think this has probably happened quite a lot over the past several years because the pandemic, the impact that it’s had on supply chains, people were scrambling in all kinds of ways, shapes and forms going to new suppliers, going to new customers, created a very dynamic marketplace. And companies want to do business with who they want to do business with. There are companies, maybe you, who basically say, I am sick of being the last choice supplier. I want to be the first choice. I want to be a regular supplier to this customer. So we’re gonna talk about that.
First of all, let’s tackle the why. Why are you the last chance, last choice supplier? Number of reasons. First of all, timing and other business relationships, right? So let’s be honest, everybody always talks about why do customers do business with you? It’s the relationship. Well, everybody’s got relationships in place, some of which they’re very happy with, some of which they’re less happy with. I think one of the reasons here though is timing and the relationship they have with other suppliers. So maybe they already have other agreements in place, right? So there’s contractual obligations that, you know, frankly, they can’t get out of. They don’t want to get out with other suppliers, with your competitors. That’s one reason.
They’re honoring historic relationships and the business that they’ve been doing, perhaps for years with certain suppliers. And it’s a relationship that’s great, right? If it’s not broke, don’t fix it, right? When the relationship is going well, often suppliers don’t have, or customers rather, don’t have a reason to turn to other suppliers. So that’s one thing, right?
Timing and their other business relationships. The second piece of this is, of why you are not a first-choice supplier, is perhaps you’ve got limited product or service offerings or just not the right ones. So let’s think about this. In both cases, the customers that I spoke with that said, hey, we really wanna be a first choice with this particular business partner. How do we get there? They’re big companies, really large companies, and often we see this with larger customers, they have minimum standards and requirements, right? They have a certain strategy that they’re adhering to from a procurement perspective. They want suppliers that bring more to the table, the variety of products, the quantities and volumes that meet their requirements to, you know, when you think about consumer products, when I think about that, they need to be able to put all of the shampoo on the shelf or all the laundry detergent on the shelf.
And they need suppliers that can fit into their formulation profiles, right? So there’s some size requirements, quantities and volumes and other things. You know, the other requirement sometimes is around credit rating and credit availability. It is possible that you’re not at the top of the list because you have limited product or service offerings or just not the right ones to meet their needs, right?
The third reason that you might very well be the last choice supplier is maybe your reputation and relationship, both industry-wide, as well as with that particular customer, right? So this is both a commercial relationship as well as individual relationship what’s the reputation that your company has around product quality and characteristics around your service and reliability. Are you meeting the standards of that customer? Are you really competing effectively with your counterparts and your competitors? Right? So it’s possible that your poor and less than ideal reputation and relationship is what’s pushing you down the list instead of up the list.
And then the fourth thing is really corporate style and fit. And you know I think we look at this and I look at this and you see companies you’re like of course they do business together they just match. Right? Whether it’s a size thing or a style thing, values, right? So companies that really value operational excellence often pair up with suppliers that are operationally excellent. Companies that value nimble, innovative responsiveness pair up with nimble, innovative, responsive suppliers, right? So there’s this whole aspect of style and fit that gets down to values, that gets down to how you do business, etc.
The one thing I’m not going to talk about is pricing. Customers are always going to say, oh, the reason that we don’t do business with you is your price. BS. That is not the reason why. That is a reason, right? And your prices have to be competitive, but you don’t have to be the lowest cost, right? If you just look at your personal life, if I look at my personal life, I can see this on a daily basis and this may be for you as your relationship with certain airlines or hotels you’re willing to pay a little bit more right, cosmetics brands, food whether it be food that you prepare at home or restaurants that you go out to. Decisions are made for reasons beyond product and price. So don’t let price be the answer as to why you’re not doing business together.
There is something else. So how do you move up the value chain or move up in priority to become the first choice supplier or just even a regular supplier with these target customers. Number 1, understand their why. Ask some questions. Why aren’t you on their list? Who’s currently serving them? How long have they been working together? What’s working well and what’s not? Do you understand their strategy, their business strategy, their procurement strategy, their innovation strategy? Do your research. Help understand the why behind how they’re making business decisions, particularly as it relates to products and suppliers.
Number 2, fix yourself. If you know that your customer experience or your servings offerings aren’t where they need to be, fix it and demonstrate improvement. In some cases, it’s changing out a salesperson. In some cases, maybe it’s your supply chain is not as robust as it needs to be. Fix what needs to be fixed and tell your story of who you are today, not who you were last year or 5 years ago, because this is the other thing. Reputations linger for a long time, and especially bad news. Bad news seems to hang around in that cloud that hovers over you. It is on you to tell your customers how you’re different today. How you fixed whatever was broken in your system in the past. How your customer experience is top-notch and what you’re doing differently. Fix it and talk about it.
Number 3, expand your reach. You need to go beyond procurement. You need to be talking with multiple touch points in your customer. Build relationships in manufacturing, build relationships in R&D with the formulators, ask more questions, demonstrate what you bring to the table, and build support across the organization. Know what they need and go back to them with the solution. Right? And then fourth is just have patience and be persistent.
When I was with Shell, there was a large consumer products company that we had been trying to do business with for years. The salesperson had been calling on them consistently for 10 years. I moved into a role and was leading market development and wrapped this customer under me and took that primary relationship. Timing is everything, changing the relationship, asking different questions. We started doing business with them for the first time in a decade and then that business continued. Part of it was just good luck and good timing. Part of it was telling a different story.
Patience and persistence will help. Don’t be a pest, because sometimes you can be a pest and that’s no good. But being patient, being persistent, fixing these things, understanding their why, fixing your customer experience and your service offerings and telling your story, expanding your reach, all of those things are gonna help you go from being the last choice to being one of the first choices.
Anyway, if you’ve had this experience where you’ve been the last choice supplier, let me know. What was it? How did you overcome it? Are you still working to overcome it? Again, shoot me a message on LinkedIn. Send me an email. Leave me a response on 1 of the platforms, whether it be the website or YouTube or elsewhere. And I hope you like this. We will be coming back to you with more tips and tactics and strategies next week. Thanks for listening to the Chemical Show. We’ll talk to you soon.