Looking for Innovation Opportunities? Consider Supplier Experience Management.

Spend Matters welcomes another guest post from Tony Fross of LogicSource.

It’s interesting how many companies have run out of ideas for innovation, especially when it comes to the “back end” of the business. Yet when you observe what is going on at the “front end” of the very same business, there’s a seemingly ceaseless drive for experimentation for the sake of innovation.

And what discipline are business leaders increasingly focused on? Customer Experience. For the last decade, the discipline of Customer Experience Management (CEM) has been slowly maturing as an increasing number of companies strive to make their customers’ experience of the brand, products, and services consistently excellent across channels.

What if the some of same tools applied to CEM were applied to procurement? What might be achieved if companies proactively focused on supplier experience management (SEM?) as a discipline? Note that I’m explicitly not talking about supplier management; I’m talking about the concept of supplier experience management.

Let’s take a look at a few of the more common CEM tools and see what ideas they might generate in the area of procurement.

Understanding a “Day In the Life”: Experience management teams often map a “day in the life” of a customer. What would a day in the life of one of your suppliers look like as they interacted with your company? What would their pain points be?

Defining Supplier Personas: Understanding customers and developing customer insights by mapping their journeys is often a first step towards defining customer personas: the shared traits of clusters of customers. Those personas, or customer types, then become the platform for strategies of increasing purchasing and loyalty to the brand in question. What types of suppliers do you have? What is the persona of those suppliers? Which personas are more valuable to you and why?

Developing Supplier Tools: Once CEM teams understand how customers behave, they seek to create tools that help customers have better experiences. How much time do you spend interacting with your suppliers? Which of those interactions would be more valuable to you and to your suppliers if they were digitized? What if you created the same kinds of self-service account management tools for your suppliers that banks offer consumers? What costs might you take out of your business? What activities and behaviors might you be able to better measure if you provided those tools?

Supplier Loyalty Programs: Most businesses establish some form of loyalty program for their customers. What about suppliers?

Many companies segment suppliers based on the strategic level of their relationship, in order to determine where they should be investing more in specific suppliers. What if you went beyond that thinking to determine what you might do to increase loyalty other than awarding business? What if you segmented suppliers into platinum, gold, and silver tiers and gave them perks according to their tier? What sorts of perks might you give them? What kinds of behaviors would you seek to incentivize?

Insider Discounts: What if you offered your suppliers the same kinds of friends and family discounts you offer your employees? What kind of loyalty might that engender?

I have seen only a small number of clients focused on this kind of innovation. But as the economy refuses to boom again, and the obvious efforts are played out (supply chain optimization, contract renegotiation, compliance, etc.), perhaps a few forward thinking leaders will look at the front of the business and think, “Why aren’t we doing that back here?”

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